CourtListener 10758219•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 10758219Txctapp15Dec 9, 2025
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15-24-00114-CV
FIFTEENTH COURT OF APPEALS
AUSTIN, TEXAS
NO. 15-24-00114-CV 12/9/2025 4:20 PM
CHRISTOPHER A. PRINE
CLERK
In the Fifteenth District
FILED IN
15th COURT OF APPEALS
AUSTIN, TEXAS
Court of Appeals 12/9/2025 4:20:34 PM
CHRISTOPHER A. PRINE
Clerk
Cecile Erwin Young, in Her Official Capacity as Executive Commissioner of
the Texas Health and Human Services Commission,
Appellant,
v.
Cook Children’s Health Plan; Texas Children’s Health Plan;
Superior HealthPlan, Inc.; and Wellpoint Insurance Company,
Appellees.
On Appeal from Cause No. D-1-GN-24-003839, in the 455th Judicial District
Court of Travis County, Texas / Honorable Laurie Eiserloh, Presiding Judge
BRIEF OF APPELLEES COOK CHILDREN’S HEALTH PLAN AND
TEXAS CHILDREN’S HEALTH PLAN
NORTON ROSE FULBRIGHT US LLP ALEXANDER DUBOSE & JEFFERSON
Susan Feigin Harris Amy Warr
State Bar No. 06876980 State Bar No. 00795708
susan.harris@nortonrosefulbright.com awarr@adjtlaw.com
Warren S. Huang Anna M. Baker
State Bar No. 00796788 State Bar No. 00791362
warren.huang@nortonrosefulbright.com abaker@adjtlaw.com
1550 Lamar, Suite 2000 100 Congress Avenue, Suite 1450
Houston, Texas 77010 Austin, Texas 78701
Telephone: (713) 651-5151 Telephone: (512) 482-9300
(Continued on Next Page)
Paul D. Trahan Karen C. Burgess
State Bar No. 24003075 State Bar No. 00796276
paul.trahan@nortonrosefulbright.com kburgess@burgesslawpc.com
NORTON ROSE FULBRIGHT US LLP Katie Dolan-Galaviz
98 San Jacinto Boulevard, Suite 1100 State Bar No. 24069620
Austin, Texas 78701 kgalaviz@burgesslawpc.com
Telephone: (512) 474-5201 BURGESS LAW PC
404 West 13th Street
Thomas A. Coulter Austin, Texas 78701
tom.coulter@nortonrosefulbright.com Telephone: (512) 482-8808
State Bar No. 04885500
NORTON ROSE FULBRIGHT US LLP Matthew P. Gordon
799 9th Street NW, Suite 1100 Admission Pro Hac Vice
Washington, D.C. 20001 mgordon@perkinscoie.com
Telephone: (202) 662-0200 PERKINS COIE LLP
1301 Second Avenue, Suite 4200
Counsel for Appellee Seattle, Washington 98101
Texas Children’s Health Plan Telephone: (206) 359-8000
Counsel for Appellee
Cook Children’s Health Plan
ORAL ARGUMENT REQUESTED
TABLE OF CONTENTS
PAGE
INDEX OF AUTHORITIES .................................................................................. iv
STATEMENT OF THE CASE ............................................................................... 1
STATEMENT REGARDING ORAL ARGUMENT ............................................. 4
ISSUES PRESENTED ............................................................................................ 5
SUMMARY OF THE ARGUMENT ...................................................................... 6
STATEMENT OF FACTS ...................................................................................... 9
I. The Children’s Plans have been trusted partners to HHSC since
the beginning of Medicaid managed care over twenty-five
years ago.............................................................................................. 9
II. The procurement has upended Medicaid managed care in Texas
and poses an existential threat to the Children’s Plans ..................... 12
ARGUMENT ......................................................................................................... 13
I. The trial court did not err in denying the Commissioner’s plea
to the jurisdiction............................................................................... 13
A. The Children’s Plans defeated the Commissioner’s
immunity by raising, at a minimum, a fact question on
their ultra vires claims ............................................................ 14
1. The Commissioner has failed to consider past
performance .................................................................. 16
2. The Commissioner has failed to consider provider
networks and quality initiatives .................................... 20
3. The Commissioner has not evaluated and certified
the bidders..................................................................... 24
i
4. The Commissioner is not promoting continuity of
care or reducing administrative and nonfinancial
barriers .......................................................................... 24
5. The Commissioner has not considered different
plans for different populations ...................................... 25
6. The Commissioner intends to award “mandatory”
CHIP contracts .............................................................. 27
7. The Commissioner’s improper disclosure to
Aetna tainted the entire procurement............................ 28
B. The Commissioner’s other jurisdictional arguments rely
on mischaracterizations of the Children’s Plans ultra
vires claims. ............................................................................ 30
1. The Children’s Plans have standing. ............................ 30
2. The Children’s Plans’ claims are ripe........................... 33
3. The exhaustion-of-remedies doctrine does not
apply. ............................................................................ 37
4. The Children’s Plans properly sued the
Commissioner ............................................................... 40
5. The Commissioner’s authority is limited by
statutory criteria and requirements ............................... 42
6. The Children’s Plans do not seek an improper
“redo” of the procurement ............................................ 44
II. The trial court did not abuse its discretion in granting a
temporary injunction ......................................................................... 48
A. The temporary injunction seeks to preserve the status
quo by preventing further unlawful conduct by the
Commissioner ......................................................................... 49
ii
B. The Children’s Plans and their members face imminent,
irreparable harm if the temporary injunction is reversed ........ 50
1. The continued viability of the Children’s Plans is
at risk ............................................................................ 50
2. The imminent risk of irreparable harm extends to
beneficiaries .................................................................. 53
3. The Commissioner cannot justify these
irreparable harms .......................................................... 56
C. The balance of the equities overwhelmingly supports a
temporary injunction ............................................................... 58
D. The temporary injunction does not violate Texas Rule of
Civil Procedure 683 ................................................................ 61
E. The trial court did not abuse its discretion in excluding
the procurement’s consensus scoring rubrics ......................... 64
CONCLUSION...................................................................................................... 68
CERTIFICATE OF COMPLIANCE WITH TEXAS RULE OF
APPELLATE PROCEDURE 9.4(I)(3) ....................................................... 70
CERTIFICATE OF SERVICE .............................................................................. 71
iii
INDEX OF AUTHORITIES
PAGE(S)
CASES
Abbott v. Doe,
691 S.W.3d 55 (Tex. App.—Austin 2024, no pet.) ........................................... 34
Adarand Constructors, Inc. v. Peña,
515 U.S. 200 (1995) .......................................................................................... 31
Brennan v. City of Willow Park,
376 S.W.3d 910 (Tex. App.—Fort Worth 2012, pet. denied) ........................... 37
Butnaru v. Ford Motor Co.,
84 S.W.3d 198 (Tex. 2002) ......................................................................... 48, 58
Cash Am. Int’l Inc. v. Bennett,
35 S.W.3d 12 (Tex. 2000) ................................................................................. 38
Chambers-Liberty Cntys. Navigation Dist. v. State,
575 S.W.3d 339 (Tex. 2019) ....................................................................... 43, 58
City of Austin v. Util. Assocs., Inc.,
517 S.W.3d 300 (Tex. App.—Austin 2017, pet. denied) .................................. 47
City of Brownsville v. Alvarado,
897 S.W.2d 750 (Tex. 1995) ............................................................................. 64
City of Corpus Christi v. Pub. Util. Comm’n of Tex.,
188 S.W.3d 681 (Tex. App.—Austin 2003, pet. denied) .................................. 28
City of El Paso v. Heinrich,
284 S.W.3d 366 (Tex. 2009) ...................................................................... Passim
City of Houston v. Norcini,
317 S.W.3d 287 (Tex. App.—Houston [1st Dist.] 2009,
pet. denied) ........................................................................................................ 35
Daniel v. Goesl,
341 S.W.2d 892 (Tex. 1960) ............................................................................. 48
iv
Data Foundry, Inc. v. City of Austin,
620 S.W.3d 692 (Tex. 2021) ............................................................................. 30
Dubai Petroleum Co. v. Kazi,
12 S.W.3d 71 (Tex. 2000) ................................................................................. 39
Elcon Enters., Inc. v. Wash. Metro. Area Transit Auth.,
977 F.2d 1472 (D.C. Cir. 1992) ......................................................................... 32
EIS Dev. II, LLC v. Buena Vista Area Ass’n,
715 S.W.3d. 689 (Tex. 2025) ............................................................................ 46
Frequent Flyer Depot, Inc. v. Am. Airlines, Inc.,
281 S.W.3d 215 (Tex. App.—Fort Worth 2009, pet. denied) ........................... 50
Function Media, LLC v. Google, Inc.,
No. 2:07-CV-279-CE, 2010 WL 276093 (E.D. Tex. Jan. 15, 2010) ................. 68
Gee v. Liberty Mut. Fire Ins. Co.,
765 S.W.2d 394 (Tex. 1989) ............................................................................. 64
Gunn v. McCoy,
554 S.W.3d 645 (Tex. 2018) ............................................................................. 65
Hall v. McRaven,
508 S.W.3d 232 (Tex. 2017) ...................................................................... Passim
Hensley v. State Comm’n on Jud. Conduct,
692 S.W.3d 184 (Tex. 2024) ............................................................................. 40
Hous. Belt & Terminal Ry. Co. v. City of Houston,
487 S.W.3d 154 (Tex. 2016) ...................................................................... Passim
In re FINA Oil & Chem. Co.,
No. 13-98-640-CV, 1999 WL 33589153 (Tex. App.—
Corpus Christi–Edinburg Mar. 11, 1999, no pet.)
(not designated for publication) ......................................................................... 67
In re Luther,
620 S.W.3d 715 (Tex. 2021) (orig. proceeding) (per curiam)........................... 63
In re Newton,
146 S.W.3d 648 (Tex. 2004) (orig. proceeding) ............................................... 59
v
In re Oncor Elec. Delivery Co.,
630 S.W.3d 40 (Tex. 2021) (orig. proceeding) ........................................... 39, 40
In re State,
711 S.W.3d 641 (Tex. 2024) (orig. proceeding) ............................................... 59
In re Stetson Renewables Holdings, LLC,
658 S.W.3d 292 (Tex. 2022) (orig. proceeding) ............................................... 45
Indep. Capital Mgmt., LLC v. Collins,
261 S.W.3d 792 (Tex. App.—Dallas 2008, no pet.) ......................................... 63
Intercont’l Terminals Co. v. Vopal N. Am., Inc.,
354 S.W.3d 887 (Tex. App.—Houston [1st Dist.] 2011, no pet.) ..................... 52
Janek v. Gonzalez,
No. 03-11-00113-CV, 2013 WL 1748795 (Tex. App.—Austin
Apr. 17, 2013, no pet.) ....................................................................................... 38
Kilgore ISD v. Axberg,
535 S.W.3d 21 (Tex. App.—Texarkana 2017, no pet.) ..................................... 37
Klumb v. Hous. Mun. Emps. Pension Sys.,
458 S.W.3d 1 (Tex. 2015) ................................................................................. 42
Lazarides v. Farris,
367 S.W.3d 788 (Tex. App.—Houston [14th Dist.] 2012, no pet.)................... 32
Leddy v. Becerra,
617 F. Supp. 3d 116 (E.D.N.Y. 2022) ............................................................... 53
Marble Falls ISD v. Scott,
275 S.W.3d 558 (Tex. App.—Austin 2008, pet. denied) .................................. 35
McElroy v. Unifund CCR Partners,
No. 14-07-00661-CV, 2008 WL 4355276
(Tex. App.—Houston [14th Dist.] Aug. 26, 2008, no pet.) ............................... 66
Morath v. Kingsville ISD,
710 S.W.3d 918 (Tex. App. [15th Dist.] 2025, no pet.) .................................... 45
Muth v. Voe,
691 S.W.3d 93 (Tex. App.—Austin 2024, pet. filed)........................................ 55
vi
Nemer Jeep-Eagle, Inc. v. Jeep-Eagle Sales Corp.,
992 F.2d 430 (2d Cir. 1993) .............................................................................. 51
Ogletree v. Glen Rose ISD,
314 S.W.3d 450 (Tex. App.—Waco 2010, pet. denied).................................... 40
Owens-Corning Fiberglas Corp. v. Malone,
972 S.W.2d 35 (Tex. 1998) ......................................................................... 64, 65
Patel v. Tex. Dep’t of Licensing & Regulation,
469 S.W.3d 69 (Tex. 2015) ............................................................................... 33
Perry v. Del Rio,
66 S.W.3d 239 (Tex. 2001) ............................................................................... 37
Presidio ISD v. Scott,
309 S.W.3d 927 (Tex. 2010) ............................................................................. 13
Riner v. City of Hunters Creek,
403 S.W.3d 919 (Tex. App.—Houston [14th Dist.] 2023, no pet.)................... 35
S.C. v. M.B.,
650 S.W.3d 428 (Tex. 2022) ............................................................................. 39
Smith v. Abbott,
311 S.W.3d 62 (Tex. App.—Austin 2010, pet. denied) .............................. 38, 43
State v. City of San Marcos,
714 S.W.3d 224 (Tex. App. [15th Dist.] 2025, pet. denied) ....................... 16, 60
State v. Hollins,
620 S.W.3d 400 (Tex. 2020) ............................................................................. 58
Tanguy v. Laux,
259 S.W.3d 851 (Tex. App.—Houston [1st Dist.] 2008, no pet.) ..................... 48
Taylor Hous. Auth. v. Shorts,
549 S.W.3d 865 (Tex. App.—Austin 2018, no pet.) ......................................... 62
Tex. Dep’t of Parks & Wildlife v. Miranda,
133 S.W.3d 217 (Tex. 2004) ....................................................................... 14, 20
vii
Tex. Dep’t of Protective & Regul. Servs. v. Mega Child Care, Inc.,
145 S.W.3d 170 (Tex. 2004) ............................................................................. 39
Tex. Dep’t of State Health Servs. v. Holmes,
294 S.W.3d 328 (Tex. App.—Austin 2009, pet. denied) .................................. 51
Tex. Tech Univ. Health Scis. Ctr. v. Rao,
105 S.W.3d 763 (Tex. App.—Amarillo 2003, pet. dism’d) .............................. 62
Texas v. Biden,
10 F.4th 538 (5th Cir. 2021) .............................................................................. 59
Tinton Falls Lodging Realty, LLC v. United States,
800 F.3d 1353 (Fed. Cir. 2015) ......................................................................... 31
TrueEX, LLC v. MarkitSERV Ltd.,
266 F. Supp.3d 705 (S.D.N.Y. 2017) ................................................................ 51
Union Carbide Corp. v. Synatzske,
438 S.W.3d 39 (Tex. 2014) ............................................................................... 26
VAS Realty, LLC v. United States,
26 F.4th 945 (Fed. Cir. 2022) ............................................................................ 31
Walker v. Gutierrez,
111 S.W.3d 56 (Tex. 2003) ............................................................................... 65
Welch v. Brown,
551 F. App’x 804 (6th Cir. 2014) ...................................................................... 53
Westheimer ISD v. Brockette,
567 S.W.2d 780 (Tex. 1978) ............................................................................. 38
Wilson v. Commun. Health Choice Tex., Inc.,
607 S.W.3d 843 (Tex. App.—Austin 2020, pet. denied) ...................... 32, 36, 43
STATUTES & RULES
1 TEX. ADMIN. CODE § 391.101(2) ......................................................................... 28
1 TEX. ADMIN. CODE § 391.209(3)(A) ................................................................... 28
viii
1 TEX. ADMIN. CODE § 391.303(d) ......................................................................... 39
1 TEX. ADMIN. CODE § 391.307(d) ......................................................................... 42
34 TEX. ADMIN. CODE § 20.208(d)(3) .............................................................. 28, 29
Acts 2023, 88th Leg., R.S., Ch. 769, § 3.01(3) ........................................................ 2
TEX. GOV’T CODE § 311.016(2) .............................................................................. 16
TEX. GOV’T CODE § 524.0002(b)(4) ....................................................................... 41
TEX. GOV’T CODE § 533.001(7) .............................................................................. 26
TEX. GOV’T CODE § 533.002 .................................................................................. 25
TEX. GOV’T CODE § 533.003(a)(1) ......................................................................... 20
TEX. GOV’T CODE § 533.003(a)(3) ......................................................................... 25
TEX. GOV’T CODE § 533.0035(a) ............................................................................ 24
TEX. GOV’T CODE § 533.004 .................................................................................. 27
TEX. GOV’T CODE § 536.052(d) .............................................................................. 21
TEX. GOV’T CODE § 552.104(a) .............................................................................. 29
TEX. GOV’T CODE § 2155.144 ................................................................................ 27
TEX. GOV’T CODE § 2155.144(c) ................................................................ 16, 19, 22
TEX. GOV’T CODE § 2155.144(d) ................................................................ 16, 19, 22
TEX. GOV’T CODE § 2155.144(n) ............................................................................ 22
TEX. HEALTH & SAFETY CODE § 62.155 ................................................................. 27
TEX. HEALTH & SAFETY CODE § 62.155(c)(1) ........................................................ 27
TEX. R. APP. P. 7.2(a) ................................................................................................ 1
TEX. R. CIV. P. 199.2 .............................................................................................. 67
TEX. R. CIV. P. 683 ................................................................................................. 62
ix
TEX. R. EVID. 803(6)(D) ......................................................................................... 65
SECONDARY AUTHORITIES
Becky Staiger, Disruptions to the Patient-Provider Relationship and Patient
Utilization and Outcomes: Evidence from Medicaid Managed Care, 81 J.
HEALTH ECON. 102574 (2022) .......................................................................... 54
Tex. Att’y Gen. Open Recs. Letter Ruling OR2023-034773 ................................. 29
Tex. Att’y Gen. Open Recs. Letter Ruling OR2024-018260 ................................. 29
Tex. Att’y Gen. Open Recs. Letter Ruling OR2024-019071 ................................. 29
x
STATEMENT OF THE CASE
Parties: Plaintiffs/Appellees: Cook Children’s Health Plan
(“Cook Children’s”), Texas Children’s Health Plan
(“Texas Children’s”), Superior HealthPlan, Inc.
(“Superior”), and Wellpoint Insurance Company
(“Wellpoint”).
All of the Plaintiffs/Appellees will be referred to as
“the Health Plans,” and Cook Children’s and Texas
Children’s will be referred to as “the Children’s Plans.”
Defendant/Appellee: Cecile Erwin Young, in Her
Official Capacity as Executive Commissioner of the
Texas Health and Human Services Commission (“the
Commissioner”).1 The agency will be referred to as
“HHSC.”
Trial Court: Hon. Laurie Eiserloh, 455th Judicial District Court,
Travis County, Texas.
Nature of the Case: The Health Plans separately filed ultra vires claims to
enjoin the Commissioner’s continued unlawful
execution and implementation of Texas’s STAR &
CHIP and STAR Kids procurements.2 CR.3308-84,
1
The Governor recently announced Commissioner Young will be retiring as
the Executive Commissioner of HHSC, effective January 2, 2026.
https://gov.texas.gov/news/post/governor-abbott-statement-on-retirement-of-texas-
hhs-executive-commissioner-young. Her successor will automatically be substituted
in this appeal at that time. See TEX. R. APP. P. 7.2(a).
2
STAR is a Medicaid managed care program that provides coverage to low-
income children, pregnant women, and families. 6.RR.102-03. CHIP provides low-
cost health coverage for children (and unborn children of pregnant women) whose
families earn too much to qualify for Medicaid but are unable to afford commercial
health insurance. 6.RR.86, 103-04. STAR Kids, which is the subject of a separate
but also-enjoined procurement, is a Medicaid program that provides healthcare
benefits to children and young adults with disabilities. 6.RR.103.
1
3510-3817, 4231-4715, 4716-5835.3 Those
proceedings were consolidated. CR.2778.
Trial Court Proceedings: The Commissioner filed a plea to the jurisdiction
seeking dismissal of the Health Plans’ claims,
CR.2949-3113, and the Children’s Plans applied for a
temporary injunction barring further ultra vires acts by
the Commissioner pending the final disposition of their
claims, CR.3308-3509, 4716-5835.
Trial Court Disposition: On October 4, 2024, following a four-day evidentiary
hearing, the trial court signed a ten-page order denying
the Commissioner’s plea and granting a temporary
injunction. CR.5875-84 (App.Tab.1).
The trial court found that:
• The Commissioner violated thirteen statutes,
constitutional provisions, and administrative
rules, CR.5877-78, which “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,” CR.5878;4
3
“CR.__” refers to the Clerk’s Record. “__.RR.__” refers to the volume and
page number of the Reporter’s Record. “Commissioner.Br.__” refers to the
Commissioner’s opening brief on the merits. “Commissioner.Resp.2nd.MFET.__”
refers to the Commissioner’s response to the Health Plans’ second motion for
extension of time to file their response briefs on the merits. “Molina.Br.__” refers to
the merits (now amicus) brief filed by Molina Healthcare of Texas, Inc. (“Molina”).
“Aetna.Br.__” refers to the merits (now amicus) brief filed by Aetna Better Health
of Texas, Inc. (“Aetna”). “App.Tab.__” refers to the Appendix attached to this brief.
4
Effective April 1, 2025, portions of the Texas Government Code were
repealed and recodified. Acts 2023, 88th Leg., R.S., Ch. 769, § 3.01(3). Section
536.052 has been recodified without substantive change as Section 543A.0052, and
Section 533.003 has been recodified without substantive change as Sections
2
• Execution and implementation of the proposed
contracts would imminently and irreparably
harm the Children’s Plans, including
“threaten[ing] Cook Children’s financial
viability” and potentially “lead[ing] to [its]
forced wind-down” and “threatening the future
viability” of Texas Children’s, CR.5879-80;
• Execution and implementation of the proposed
contracts would irreparably harm the public
interest by “disrupt[ing]” STAR & CHIP
beneficiaries’ “access to care and continuity of
care, thereby threatening the medical care and
the very health and welfare of those
beneficiaries,” CR.5882-83; and
• An injunction would not harm either HHSC or
the public interest because “(1) operations under
the intended contract awards are not scheduled
to start until September 1, 2025, and (2) HHSC
has previously delayed the [procurement]
several times and was able to continue providing
coverage through the current STAR & CHIP
contracts by extending the contracts in effect at
the time,” CR.5882.
The trial court then ordered temporary injunctive relief
against the Commissioner, enjoining her from further
carrying out those ultra vires acts, including:
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
[procurement] or to further the procurement or
540.0204 and 540.0205. Id. For consistency, this brief cites the statutes as they
existed at the time of the temporary injunction hearing.
3
contracting processes for the STAR & CHIP
[procurement].
CR.5883.5
On October 21, 2024, the Commissioner appealed the
trial court’s order denying the plea and granting a
temporary injunction. CR.5957-60.
STATEMENT REGARDING ORAL ARGUMENT
The trial court correctly applied well-established Texas law to the facts of this
case. But the stakes—legal and practical—are high. The Commissioner’s assertion
of absolute, unreviewable authority to conduct the procurement would gut the ultra
vires doctrine and give her unchecked authority to ignore important limits on her
discretion, including statutory directives governing how the State’s most significant
procurements must be conducted. The procurement challenged here—the largest in
Texas history, worth $10 billion annually for up to twelve years—will directly affect
the healthcare of millions of women and children across Texas and determine the
Children’s Plans’ continued existence . The Court should grant oral argument.
5
The trial court also made findings regarding the separate STAR Kids program,
supra at 1 n.2, for which HHSC is currently evaluating proposals. The trial court
found that the STAR Kids procurement will be conducted in the same flawed manner
as the STAR & CHIP procurement and “will therefore also violate statutory and
regulatory requirements and be ultra vires.” CR.5878-79. Accordingly, the trial court
also enjoined the Commissioner 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” procurement. CR.5883.
4
ISSUES PRESENTED
1. Did the trial court erroneously deny the Commissioner’s plea to the
jurisdiction where (a) the Children’s Plans overcame the Commissioner’s sovereign
immunity by raising a fact question on their ultra vires claims, (b) they have standing
to assert their ultra vires claims, (c) their claims are ripe, (d) the exhaustion-of-
administrative-remedies doctrine does not apply, (e) the Commissioner is the proper
defendant, (f) the Commissioner’s authority to undertake the procurement is limited
by statute, and (g) they properly seek only prospective relief?
2. Did the trial court abuse its discretion in granting the temporary
injunction where (a) the Children’s Plans demonstrated a probable right to relief on
their ultra vires claims, (b) they and their members will suffer irreparable harm if
the procurement is allowed to proceed while the case is litigated, (c) the balance of
the equities overwhelmingly favors the injunction’s issuance, (d) the injunction
complies with Texas Rule of Civil Procedure 683, and (e) the trial court did not
abuse its discretion in excluding HHSC’s consensus scoring rubrics and, in any
event, the exclusion of the rubrics did not probably result in the rendition of an
improper judgment?
5
SUMMARY OF THE ARGUMENT
The Legislature entrusted HHSC with a vital task—selecting the health plans
best suited to manage healthcare for Texas Medicaid participants over the next
decade. With the health of millions of Texans and up to $120 billion at stake, the
Legislature understandably chose not to leave these decisions to the agency’s sole
and unfettered discretion. Instead, it enacted a detailed statutory framework HHSC
was required to follow.
That didn’t happen. The Commissioner defied those statutory mandates, with
devastating consequences. Local, nonprofit plans like the Children’s Plans—who
are affiliated with world-renowned children’s hospitals, provide high-quality,
uniquely integrated care, and have been part of Texas’s Medicaid managed care
program since its inception more than two decades ago—stand to be excluded
entirely. In their places, subsidiaries of national for-profit insurers will receive
contracts—some of which, by HHSC’s own metrics, deliver substandard care.
Shortly before the procurement, HHSC delivered a blistering assessment of one such
plan, Molina, concluding it “does not meet quality of care measure minimum
performance standards in any of the programs it operates in.” 5.RR.262 (emphasis
added). Yet Molina somehow received the procurement’s top score and, as it stands,
many thousands of Medicaid members will have to transfer their healthcare coverage
to Molina from the Children’s Plans—which, in turn, might cease to exist.
6
These shocking results raise an obvious question: How did the procurement
go so wrong? Discovery and a four-day evidentiary hearing provided the answer.
The Commissioner violated thirteen statutes, constitutional provisions, and
administrative rules, including several that require her to consider past performance
and quality to ensure high-quality plans are selected over substandard ones. At the
hearing, witness after witness acknowledged the relevance of these requirements but
conceded the lack of any evidence of their consideration. The result? Another
botched procurement that, if allowed to stand, will force all 500,000-plus of the
Children’s Plans’ members to switch to lower-quality, profit-driven health plans.
The decision to ignore quality data is inexplicable. How a plan served its
members in the past is perhaps the best indication of how it will serve them in the
future. But this case is not about mere irrationality—it’s about illegality. The
Legislature sought to avoid this very scenario by commanding consideration of past
performance and granting preferences to plans that have successfully implemented
quality initiatives. But the Commissioner ignored those legislative imperatives
entirely. Her disregard of the law justifies ultra vires claims to prevent her from
continuing to defy statutory mandates and inflicting irreparable harm on the
Children’s Plans and their members—including some of Texas’s most vulnerable
children and expectant mothers.
7
In light of her earlier admissions and the overwhelming evidence, the
Commissioner struggles to defend the procurement. She does not claim, for instance,
that she documented past performance or considered quality initiatives because she
did not. Without a factual leg to stand on, the Commissioner resorts to misdirection.
Drawing from a grab bag of jurisdictional arguments, she suggests the Children’s
Plans cannot assert ultra vires claims challenging her discretion to conduct the
procurement, even though the Texas Supreme Court has explained the doctrine
exists to prevent officials with limited discretion (like the Commissioner) from
exceeding the bounds of their statutory authority. She asserts the Children’s Plans’
claims must exhaust administrative remedies before bringing suit, even though
exhaustion is not required for common-law ultra vires claims and would render their
requested relief improperly retrospective. And she claims the Children’s Plans seek
“premature” judicial review of an agency decision to force a “redo” of the
procurement—even though their claims are ripe and that is neither the doctrinal basis
for their claims nor their requested relief.
Setting aside the Commissioner’s jurisdictional red herrings, the path to
affirming the temporary injunction is clear. The trial court’s factual findings, which
must be accorded significant deference, show that the Children’s Plans demonstrated
a probable right to relief on their claims (which fall squarely within the ultra vires
doctrine), a likelihood of irreparable harm, and a balance of equities overwhelmingly
8
favoring injunctive relief. As a result, this Court should affirm the denial of the
Commissioner’s plea to the jurisdiction and grant of the temporary injunction.
STATEMENT OF FACTS
I. The Children’s Plans have been trusted partners to HHSC since the
beginning of Medicaid managed care over twenty-five years ago.
The Children’s Plans are local, nonprofit managed care organizations
(“MCOs”) that provide services to STAR & CHIP and STAR Kids members as part
of fully integrated pediatric-healthcare systems centered around world-renowned
and highly ranked children’s hospitals—Texas Children’s Hospital in Houston and
Cook Children’s Medical Center in Fort Worth. Unlike national, for-profit plans, the
Children’s Plans do not seek to maximize market share across the state. 8.RR.132-
33; CR.4035, 4727, 4741. Rather, they operate only within the geographic regions
served by their respective affiliated hospitals. 8.RR.132-33; CR.4035, 4741, 4747.
Texas Children’s. Texas Children’s is the first MCO in the country created
just for children. CR.4717. For over 25 years, since the inception of Medicaid
managed care and the adoption of CHIP in Texas, Texas Children’s has dedicated
itself exclusively to providing high-quality care to approximately 420,000
vulnerable children and expectant mothers in the Harris and Jefferson Service Areas.
CR.85, 4717; 8.RR.35-36, 39; 9.RR.PX.161 at 234.
Texas Children’s has a longstanding affiliation with Texas Children’s
Hospital, the largest children’s health system in the United States; Texas Children’s
9
Pediatrics; Texas Children’s Urgent Care; and affiliated specialty physicians and
practitioners with academic affiliations with Baylor College of Medicine. This
pediatric-focused health system provides unique and critical access to some of the
nation’s leading experts in pediatric and maternal medicine. CR.134-35, 2279. These
affiliations allow close coordination of care and reduction of administrative burdens
for patients and families, which standalone health plans cannot offer. 8.RR.18.
HHSC has recognized the extraordinary care Texas Children’s provides.
When Medicaid members do not enroll with a plan, HHSC auto-assigns them one
based on various criteria, with performance quality at the top, so that the highest-
quality plans receive the most members. 8.RR.40-41. Reflecting its high quality
ratings, nearly half (43%) of auto-enrollees are assigned to Texas Children’s even
though there are five health plans in the Harris Service Area; by contrast, Molina,
the top scorer in the procurement, receives only 3%. 8.RR.42-43. Texas Children’s
is also the popular choice among members who affirmatively choose a plan—nearly
50% of members select it over the other health plans. 8.RR.43-44; 9.RR.PX.161 at
234.
Cook Children’s. Cook Children’s Medical Center, the cornerstone of the
larger Cook Children’s healthcare system, has served Fort Worth families for over
100 years. 8.RR.129. Its affiliated health plan was formed in 1999 (when Texas
transitioned its Medicaid program to a managed-care model) and has, for more than
10
two decades, been an integral component of STAR & CHIP and STAR Kids.
8.RR.129-30. As part of the only fully integrated pediatric-healthcare system in the
Fort Worth area, Cook Children’s members benefit from shared electronic records
and collaboration and coordination between doctors, nurses, and other staff.
8.RR.133-35. The health plan is able to leverage this network to provide additional
services not otherwise covered by the State, such as fresh groceries for high-risk
pregnant members, transportation to and from medical appointments and social-
service offices, and even generators to assist members with medical needs during
natural disasters. 8.RR.135-37.
These efforts have gone neither unnoticed nor unrewarded. Cook Children’s
consistently receives “A” grades from the Texas Comptroller of Public Accounts for
its service related to STAR & CHIP, routinely earns top marks on quality metrics,
and boasts higher provider satisfaction than other plans. CR.3316. HHSC’s most
recent public measurements of quality outcomes also show that, in 2022, Cook
Children’s earned among the most “above high performance standards” in the
state—higher than all current Tarrant Service Area contractors and presumptive
awardees for STAR, and more than twice as high as Molina’s 21% mark. CR.3318.
For CHIP, the differences are even more dramatic—Cook Children’s had nearly five
times as many performance measures “above high performance standards” as
Molina’s 9% score. Id.
11
II. The procurement has upended Medicaid managed care in Texas and
poses an existential threat to the Children’s Plans.
HHSC has canceled multiple STAR & CHIP procurements over the past
decade because of pervasive errors. 5.RR.180; 6.RR.146, 233; 7.RR.11. This
procurement is no different.
In December 2022, the Commissioner announced HHSC’s new procurement.
CR.135. Despite boasting about consulting with Mercer, an outside firm, to design
the procurement, 6.RR.136, 196-97, the Commissioner ignored essential Mercer
recommendations designed to ensure compliance with Texas law, including one to
expressly award points based on past performance, 5.RR.181; infra at 17. The
Commissioner reviewed and scored written proposals and oral presentations from
eighteen bidders. 9.RR.PX.38 at 23; 9.RR.PX.92 at 5-6. On top of the other legal
errors that permeated the procurement, HHSC admitted it mistakenly provided
Aetna—one of the bidders—with other bidders’ proposals while the procurement
was ongoing, before Aetna’s oral presentation. 5.RR.137-40.
On March 7, 2024, the Commissioner issued a notice of intent to award,
announcing the health plans with which HHSC intended to contract to administer
STAR & CHIP for at least the next six (and potentially up to twelve) years. 5.RR.81,
203-04; 9.RR.PX.95. The top scorers received their first-choice selections of
preferred service areas (up to seven) among Texas’s thirteen service areas. CR.3519-
22; 9.RR.PX.38 at 17-18, 29-30.
12
The Children’s Plans learned that, for the first time in program history, they
would not receive contracts. 9.RR.PX.95. Instead, their respective service areas
would be served almost exclusively by subsidiaries of large, national
organizations—all for-profit and none with the Children’s Plans’ deep roots in their
communities or longstanding commitment to the health of Texas’s children and
expectant mothers. Id.; CR.3310-11, 4717-18.
These results pose an existential threat to the Children’s Plans because
Medicaid and CHIP beneficiaries are the sole members they serve. Without these
contracts, they will likely cease to exist. 8.RR.35-36, 39, 159-60. The results will
also harm their members. Every one of the approximately 420,000 Texas Children’s
members and 115,000 Cook Children’s members will be forced to switch to new
health plans like Molina and Aetna that do not offer the benefits of a fully integrated
pediatric-healthcare system. 8.RR.39, 133, 135. Many will also have to find new
healthcare providers. 8.RR.22, 161. Statewide, more than 1.5 million STAR &
CHIP beneficiaries will be forced to switch health plans. 5.RR.190; 6.RR.97-98;
7.RR.38.
ARGUMENT
I. The trial court did not err in denying the Commissioner’s plea to the
jurisdiction.
While an order on a plea to the jurisdiction is reviewed de novo, Presidio ISD
v. Scott, 309 S.W.3d 927, 929 (Tex. 2010), “in a case in which the jurisdictional
13
challenge implicates the merits of the plaintiffs’ cause of action and the plea to the
jurisdiction includes evidence,” the reviewing court must examine “the relevant
evidence to determine if a fact issue exists,” Tex. Dep’t of Parks & Wildlife v.
Miranda, 133 S.W.3d 217, 227 (Tex. 2004). In making this determination, the
reviewing court “take[s] as true all evidence favorable to the nonmovant” and
“indulge[s] every reasonable inference and resolve[s] any doubts in the nonmovant’s
favor.” Id. at 228. If the evidence creates a fact question regarding the jurisdictional
issue, then the denial of the plea must be affirmed. Id. at 227-28.
Here, the Commissioner failed to meet her heavy burden to prove lack of
jurisdiction as a matter of law.
A. The Children’s Plans defeated the Commissioner’s immunity by
raising, at a minimum, a fact question on their ultra vires claims.
The Children’s Plans seek prospective injunctive relief to prevent the
Commissioner from continuing to defy statutory mandates in the procurement. Their
claims and the temporary injunction thus fall squarely within the ultra vires
exception to sovereign immunity. As the Supreme Court has clarified, immunity
“does not protect every act by a government officer that requires some exercise of
judgment—a government officer with some discretion to interpret 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.” Hous. Belt
& Terminal Ry. Co. v. City of Houston, 487 S.W.3d 154, 158 (Tex. 2016). The Court
14
contrasted cases involving “absolute discretion—discretion where no specific,
substantive, or objective standards govern the exercise of judgment” and immunity
thus applies—with cases where an official has “some authority or discretion” and
“his determinations are [] ultra vires because he acted beyond his granted discretion
in making them.” Id. at 161 (emphasis added). In other words, an ultra vires claim
lies where an official “act[s] pursuant to, yet outside the limits of, a statutory grant
of authority”—such as, for example, “making the type of determination which they
had authority to make … in a way the law did not allow.” Id. at 162 (citing City of
El Paso v. Heinrich, 284 S.W.3d 366, 371-78 (Tex. 2009)).
Although the Commissioner has exclusive authority to plan and direct
Medicaid procurements, she does not enjoy absolute discretion in how she conducts
them. Instead, the Legislature expressly limited her authority by enacting
procurement statutes requiring her to consider certain factors and apply specific
preferences, including consideration of bidders’ past performance and preference for
plans that have successfully implemented quality initiatives. The Commissioner
ignored those guardrails. HHSC’s own documents and its leadership’s testimony
show that the agency’s process for scoring bids was designed to—and did—omit
those required factors and preferences. They were absent from the scoring sheets
used to evaluate bids. They were absent from the training materials for the
evaluators. And the evaluators were never instructed to consider them.
15
The ultra vires doctrine exists to remedy the Commissioner’s defiance of the
Legislature’s mandates. See, e.g., State v. City of San Marcos, 714 S.W.3d 224, 239
(Tex. App. [15th Dist.] 2025, pet. denied) (“Governmental immunity does not bar a
suit that seeks to bring local government officials into compliance with state law.”).6
1. The Commissioner has failed to consider past performance.
In a procurement, HHSC “shall document that it considered all relevant
factors,” including “indicators of probable vendor performance under the contract
such as past vendor performance,” to ensure it receives “the best value.” TEX. GOV’T
CODE §§ 2155.144(c)-(d) (emphasis added) (App.Tab.2). “‘Shall’ imposes a duty,”
id. § 311.016(2), and agency leadership understood the statutory requirements were
mandatory. Jimmy Ramirez, HHSC’s Director of Major Procurement, Medicaid
Division, and HHSC’s designated point person for the procurement, 5.RR.202;
6.RR.121,confirmed past performance is a “relevant factor,” 5.RR.225-27,
triggering the statutory duty to consider and document it, 5.RR.227. But the agency
did neither.
6
Molina contends the courts are powerless to prevent the violations of law
found by the trial court. Molina.Br.26-35. Though Molina suggests “[t]his reality
does not mean HHSC and Commissioner Young are free to violate the cited
procurement standards,” id. at 28, it fails to identify any other manner of judicial
recourse. The ultra vires doctrine exists precisely for occasions like this, to ensure
that state officials follow the law.
16
The complete omission of past performance from HHSC’s scoring process
clearly evidences the Commissioner’s decision to ignore this factor. In fact,
Mercer—the agency’s outside consultant on designing the procurement—
recommended placing past performance on the scoring sheet as a separate category
with independent scoring weight, 5.RR.181; 9.RR.PX.114, but the agency rejected
the recommendation, 5.RR.181, 254-55.7 Moreover, the agency neither instructed
evaluators to consider these statutory requirements nor included them in evaluator
training materials. 5.RR.233. The Commissioner thus ensured past performance
would not be considered—the opposite of her statutory mandate.
Nor was past performance documented as Section 2155.44 requires. Mr.
Ramirez admitted it “was not an express and independent consideration in this
procurement” and “there is no specific documentation showing the agency’s
consideration of relevant factors including past performance.” 5.RR.227-28. He
further admitted evaluators were instructed to consider how bidders would perform
7
The Commissioner tries to spin this evidence in her favor, suggesting her
rejection of Mercer’s recommendation constituted an exercise of “judgment and
deliberation” for which no ultra vires claim can lie. Commissioner.Br.21-22. But
she misses the point. The Children’s Plans do not contend the Commissioner was
required to accept Mercer’s recommendation about how to consider past
performance. Rather, they argue her rejection of that recommendation is further
evidence she chose not to consider past performance at all, which she did not have
discretion to do under Section 2155.144(c).
17
in the future and did not “document anything about what [respondents] have done
in the past or are presently doing.” 5.RR.230.
The Commissioner’s refusal to consider and document past performance
might have stemmed from a misunderstanding of HHSC’s statutory requirements.
When asked by legislators whether “past performance [is] part of your
measurement,” in this procurement, the Commissioner responded no, telling the
Legislature she credited bidder’s promises of future performance—“how … an
organization is going to fulfill [] quality requirements” but not a bidder’s “current
metrics” or prior track record. CR.57. At the same hearing, Kay Molina, HHSC’s
Deputy Executive Commissioner for Procurement and Contracting Services,
confirmed the agency’s belief that “[s]tate law … doesn’t really provide for” the
consideration of past performance. CR.60; 9.RR.PX.161 at 113.
Confronted with overwhelming evidence she did not comply with the statute,
the Commissioner deploys a legal feint, arguing that Section 2155.144(d) cannot
support an ultra vires claim because it “does not require consideration of every
enumerated factor” and “vests ‘absolute discretion’ in the Commissioner to weigh
and apply the factors.” Commissioner.Br.20 (quoting Hall v. McRaven, 508 S.W.3d
232, 241 (Tex. 2017)). But she cannot avoid the plain statutory text or the sworn
testimony of Mr. Ramirez. While Section 2155.144(d) states HHSC “may consider
all relevant factors in determining the best value, including” the enumerated factors,
18
Section 2155.144(c) directs that “[t]he agency shall document that it considered all
relevant factors under Subsection (d).” TEX. GOV’T CODE § 2155.144(c)-(d)
(emphasis added). Thus, while not all enumerated factors may be relevant in every
procurement, those that are relevant must be considered. For this procurement, Mr.
Ramirez confirmed that bidders’ past performance is highly relevant and the
Commissioner is required to consider and document past performance. 5.RR.225-
28. Yet neither she nor anyone else at HHSC did so. 5.RR.227-30.
The Commissioner also attempts to rewrite the record, claiming Mr. Ramirez
“testified that past performance was documented in the procurement file.”
Commissioner.Br.21 (emphasis added). But the cited testimony does not support this
contention. Mr. Ramirez merely claimed the entire procurement file somehow
constitutes “documentation showing the agency’s consideration of relevant factors
including past performance” and yet, in the same breath, he agreed the file did not
demonstrate the Commissioner’s compliance. 5.RR.227. Ms. Molina testified
likewise, emptily asserting that “if past performance was [in the response], it was
considered.” 5.RR.110. Together, the only evidence they offer of the agency’s
consideration and documentation of past performance is their own ipse dixit,
contradicting documents and testimony (including Ms. Molina’s own
representations to the Legislature) showing the opposite. To the extent their say-so
is any evidence of the Commissioner’s compliance with this statutory directive, it is
19
not remotely conclusive, as she must show for reversal. See Miranda, 133 S.W.3d
at 227-28.
2. The Commissioner has failed to consider provider networks
and quality initiatives.
The Commissioner has also disregarded Texas Government Code
§§ 533.003(a)(1) and 536.052(d)’s mandates restricting her authority to conduct the
procurement.
First, the Commissioner “shall give preference to organizations that have
significant participation in [their] provider network[s] from each health care provider
in the region who has traditionally provided care to Medicaid and charity care
patients.” TEX. GOV’T CODE § 533.003(a)(1) (emphasis added) (App.Tab.3). But the
evidence establishes the Commissioner did not consider (much less apply) this
preference even though she recognized it was mandatory. 5.RR.91. The preference
was not reflected on the scoring sheets, 5.RR.94-95; the agency did not train or
instruct evaluators to apply the preference, 5.RR.88-89; and the agency did not
consider network data it already possessed, 5.RR.93-94.
The Commissioner neither disputes this evidence nor contends she satisfied
Section 533.003(a)(1). Instead, she points to other terms in the statute that, she
claims, afford her discretion. See Commissioner.Br.26; see also Aetna.Br.28. These
terms at best indicate she has discretion in how she applies the preference. But the
issue here is whether she applied it at all, and there is no evidence she did. The
20
Commissioner cannot substitute the mandatory “shall” with the flexibility of
“how.”8
Second, Section 536.052(d) states the Commissioner “shall give preference
to an organization that offers a managed care plan that successfully implements
quality initiatives … or meets quality of care and cost-efficiency benchmarks.” TEX.
GOV’T CODE § 536.052(d) (emphasis added) (App.Tab.4). Again, this didn’t happen.
The Commissioner admits she never developed the required benchmarks. 6.RR.44;
see also 5.RR.101, 197, 224. Nor did she include this preference on the scoring sheet,
5.RR.104-05; train or instruct the evaluators to give such preference, 5.RR.103-04;
or consider data HHSC already possessed, 6.RR.43-44. Once again, the evidence
establishes the Commissioner erred by failing to apply Section 536.052(d) at all.9
The Commissioner disagrees, broadly asserting Section 2155.144(n) allows
her to disregard any statutory criteria other than “best value.” Commissioner.Br.24.
8
This is true even if, as Aetna (but not the Commissioner) suggests, the
provider-network requirement no longer “retain[s] practical significance.”
Aetna.Br.30. The Legislature did not give the Commissioner the prerogative to
disregard mandatory considerations on this or any other basis.
9
The Commissioner and Aetna claim Technical Question 13 is evidence this
preference was given. Commissioner.Br.29, Aetna.Br.33. But that question merely
asked about respondents’ “strategies and initiatives” for quality improvement and
performance evaluation, 9.RR.PX.38 at 38—in other words, what respondents want
or plan to do going forward, Aetna.Br.35-36 (quoting responses to Technical
Question 13 that illustrate this aspirational focus)—not what quality initiatives they
had already implemented.
21
This is post hoc revisionism of the highest order. Nothing in the record suggests the
Commissioner or anyone else disregarded Section 533.003(a)(1) or 536.052(d)
because of a “conflict” with Section 2155.144, TEX. GOV’T CODE § 2155.144(n)
(“To the extent of any conflict, this section prevails over any other state law relating
to the procurement of goods and services[.]” (emphasis added)), nor does the
Commissioner explain what such a “conflict” might have been. And even if such a
conflict had existed, that would still not have given the Commissioner license to
disregard quality initiatives. Section 2155.144 itself requires consideration and
documentation of “the quality and reliability of the [bidder’s] … services” and, as
discussed above, “indicators of probable [] performance under the contract such as
past [] performance.” TEX. GOV’T CODE §§ 2155.144(c), (d)(3), (d)(5) (App.Tab.2).
Further underscoring the Commissioner’s ex post reinvention is her argument
that “[o]nly if two bidders offer the same value would these preferences even need
to come into play.” Commissioner.Br.24 (emphasis added). Nothing in the statute’s
text supports her interpretation, and the record shows HHSC construed this
requirement the same way the Children’s Plans do:
Q. Now, Ms. Molina, would you agree with me that one common
and ordinary meaning of preference would be choosing one thing
over another?
A. That’s one way you could define preference.
Q. But that’s not how HHSC applied preference as used in Section
533.003 in the STAR and CHIP procurement, is it?
22
A. No. …
Q. Now, in applying preferences used in Section 62.155(c), the
agency here applied the term “preference” to mean choosing one
type of respondent over another; correct?
A. Yes.
Q. And that was different than how HHSC applied the term
“preference” in 533.003 and 536.052; correct?
A. Yes.
5.RR.93, 119. Even if the Commissioner’s (erroneous) view of the law had been to
apply these statutory preferences only as tie-breakers, Ms. Molina made clear that
HHSC did not apply them in this way. And, as the record shows, HHSC did not even
evaluate or consider the information required to do so.
As a parting shot, the Commissioner blames the procurement’s shortcomings
on the bidders themselves, suggesting they should have submitted critical
information even if HHSC didn’t solicit it. Commissioner.Br.25. But again, there is
no evidence the Commissioner actually applied the required preference, regardless
of whether bidders submitted relevant information. And, in any event, the
procurement was not styled as an open-ended exercise that afforded bidders
unfettered discretion and unlimited opportunity to provide every piece of
information conceivably relevant to their bids. Specific questions were asked, tight
page limits were imposed, and bidders were directed to respond only to the Technical
Questions and not provide any other materials. 5.RR.84-85, 96-97; 7.RR.18, 88-89;
23
9.RR.PX.38. In the end, the Commissioner failed to evaluate the information
collected or already in her possession and to instruct the procurement evaluators to
award extra points for the required considerations and preferences. She can’t pass
the buck.
3. The Commissioner has not evaluated and certified the
bidders.
Section 533.0035(a) states the Commissioner “shall evaluate and certify that
[MCOs are] 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) (App.Tab.5). That didn’t happen either. HHSC’s witnesses
admitted the agency allowed bidders to self-certify and did not verify or evaluate
those self-certifications. 5.RR.272-74. There was no evaluation and certification at
all—HHSC merely rubber-stamped documents prepared by the bidders. Par for the
course, the Commissioner relies on her purported discretion, suggesting no violation
could have occurred because “[t]he statute does not specify the content or extent of
evaluation, leaving this to the agency’s discretion.” Commissioner.Br.36. But again,
the issue is not how but whether she undertook that duty—and she did not.
4. The Commissioner is not promoting continuity of care or
reducing administrative and nonfinancial barriers.
Section 533.002 further states the Commissioner “shall implement the
Medicaid managed care program by contracting with managed care organizations in
24
a manner that, to the extent possible[,] … promot[es] continuity of care” and
“reduces administrative and other nonfinancial barriers for recipients in obtaining
health care services.” TEX. GOV’T CODE § 533.002 (emphasis added) (App.Tab.6).
HHSC officials nevertheless testified they affirmatively decided not to consider the
1.5 million-plus Texans who would need to switch health plans—and possibly
healthcare providers as well. 5.RR.190; 6.RR.97-98; 7.RR.38-40.
The Commissioner meritlessly suggests “designing the managed care
program as a whole” and “offering different product lines” satisfies this imperative.
Commissioner.Br.37. But offering various “product lines” (like HMOs or PPOs)
does not ensure continuity of care for children and pregnant women forced to change
health plans. Nor does a “readiness review” following the award of contracts ensure
continuity of care for the more than 1.5 million Texans who will be forced to change
health plans. Contra id.; Aetna.Br.48-52. Indeed, many will undoubtedly suffer
from disruptions in their care. Infra at 53-56.
5. The Commissioner has not considered different plans for
different populations.
Section 533.003(a)(3) provides the Commissioner “shall consider the need to
use different managed care plans to meet the needs of different populations.” TEX.
GOV’T CODE § 533.003(a)(3) (emphasis added) (App.Tab.3). HHSC officials
25
conceded she did not fulfill this requirement because she did not consider how
contract awards would impact different populations. 5.RR.166; 6.RR.64-66, 93-96.10
In response, the Commissioner argues only that she “has noticed an intent to
award contracts to different organizations in different [service areas].”
Commissioner.Br.29. But “different populations” under Section 533.003(a)(3)
cannot in practice refer to STAR & CHIP members in different regions, as Mr.
Ramirez testified that HHSC does not recognize differences among members based
on service areas. See 6.RR.66 (“Q. So if they meet the requirements for STAR/CHIP
… then a member is a member is a member is a member? A. Yes.”). Moreover, if
the Legislature had intended “different populations” to refer to different geographic
regions, it could have used the term “regions” in Section 533.003(a)(3) rather than
“populations.” After all, the term “region” has a specific meaning in this context.
See TEX. GOV’T CODE § 533.001(7) (“[h]ealth care service region” or “region”
means “a Medicaid managed care service area as delineated by the commission”)
(App.Tab.7). But it didn’t. See, e.g., Union Carbide Corp. v. Synatzske, 438 S.W.3d
10
Aetna introduces yet another strawman, claiming the Children’s Plans
“conten[d] that HHSC should have phrased the questions differently” to seek
information about different populations. Aetna.Br.57. Not so. While the
Commissioner’s failure to solicit relevant information reflects her failure to consider
certain criteria, it is the Commissioner’s disregard of mandatory considerations like
Section 533.003(a) that underlies the ultra vires claims.
26
39, 52 (Tex. 2014) (“We take statutes as we find them, presuming the Legislature
included words that it intended to include and omitted words it intended to omit.”).
At any rate, even if “different populations” means what the Commissioner
says, she still failed to comply with the statute because, she did nothing to ensure the
use of different MCOs to meet the needs of different populations. After all, she did
not assign MCOs to specific service areas but instead allowed each winning bidder
to choose its own service areas, CR.3519-22; 5.RR.76-78; 9.PX.38 at 17-18, 29-30,
irrespective of whether they are well-suited to those areas.
6. The Commissioner intends to award “mandatory” CHIP
contracts.
Although Medicaid programs like STAR are subject to mandatory contracting
requirements, TEX. GOV’T CODE §§ 2155.44, 533.004 (App.Tab.8), these mandates
do not apply to non-Medicaid programs like CHIP, TEX. HEALTH & SAFETY CODE
§ 62.155 (App.Tab.9). HHSC executives nevertheless confirmed their intention to
award “mandatory” CHIP contracts. 5.RR.111, 118; 6.RR.50, 59. The
Commissioner’s brief once again misconstrues the Children’s Plans claims. The
issue is not whether “CHIP and STAR services can[] be procured in the same RFP”
or whether tandem awards are “consistent with [] best-value scoring,”
Commissioner.Br.37-38, but rather whether mandatory CHIP contracts can be
awarded. They cannot. Cf. TEX. HEALTH & SAFETY CODE § 62.155(c)(1) (providing
that Commissioner may only “give preference to a person who provides similar
27
coverage under the Medicaid program,” not mandatory contract (emphasis added));
see also City of Corpus Christi v. Pub. Util. Comm’n, 188 S.W.3d 681, 690 (Tex.
App.—Austin 2003, pet. denied) (“[A]n agency may not, in the guise of implied
powers, exercise what is effectively a new power, or a power contrary to a statute,
on the theory that such exercise is expedient for the agency’s purpose, nor may it
contravene specific statutory language[.]” (citation omitted)).
7. The Commissioner’s improper disclosure to Aetna tainted
the entire procurement.
Texas law requires HHSC to conduct procurements in a fair and consistent
manner. See 1 TEX. ADMIN. CODE §§ 391.101(2) (App.Tab.10), 391.209(3)(A)
(App.Tab.11). It also generally prohibits agencies from “disclos[ing] information
derived from proposals … to any competing respondent prior to award or
cancellation of [a] solicitation.” 34 TEX. ADMIN. CODE § 20.208(d)(3) (App.Tab.12).
But HHSC executives acknowledged that other bidders’ proposals were improperly
leaked to Aetna—one of the top-scoring bidders—while the procurement was
ongoing (specifically, before Aetna’s oral presentation). 5.RR.137-40. This wrong-
ful disclosure undermined the procurement’s integrity because Aetna got a sneak
peek at competitive information that was not provided to other bidders. 6.RR.15-17.
The Commissioner attempts to defend the wrongful disclosure by hiding
behind the Public Information Act (“PIA”), which, she argues, compelled her to
release the information and trumps any procurement regulation.
28
Commissioner.Br.32-34. This position is surprising. The Children’s Plans are
currently engaged in separate PIA lawsuits in which the Commissioner has argued
that, even as of 2024, analogous documents—including those HHSC unlawfully
released to Aetna—cannot be released under the PIA because it would harm
competitive interests. See TEX. GOV’T CODE § 552.104(a) (App.Tab.13); CR.2979.
The Attorney General has agreed with this position. See Tex. Att’y Gen. Open Recs.
Letter Ruling OR2023-034773 (App.Tab.14); Tex. Att’y Gen. Open Recs. Letter
Ruling OR2024-018260 (App.Tab.15); Tex. Att’y Gen. Open Recs. Letter Ruling
OR2024-019071 (App.Tab.16). This argument is yet another attempt at post hoc
revision the Court should reject.11
Furthermore, while the Commissioner accuses the Children’s Plans of “ipse
dixit” in claiming the unlawful disclosure tainted the procurement’s results,
Commissioner.Br.34, the evidence she cites to the contrary is itself unsubstantiated,
see 9.RR.157 at 7 (conclusory statement from Ms. Molina that “no violation … has
occurred that affected the integrity of the solicitation or the resulting contract
awards”). And Ms. Molina conceded at the evidentiary hearing that she does not
11
The Commissioner also argues she did not violate Texas law because she did
not “disclose[] information derived from proposals,” Commissioner.Br.33 (quoting
34 TEX. ADMIN. CODE § 20.208(d)(3))—seemingly proposing a meaningful
distinction between the proposals themselves and isolated information derived from
them. That makes no sense. Increasing the magnitude of harm (by disclosing not
only derived information but the entire proposals) does not somehow limit the
severity of the offense. It only magnifies the problem.
29
know whether and how Aetna used the wrongfully disclosed materials or whether
any prejudice resulted. 5.RR.147-49.
B. The Commissioner’s other jurisdictional arguments rely on
mischaracterizations of the Children’s Plans’ ultra vires claims.
Throughout her brief, the Commissioner (like Molina and Aetna)
mischaracterizes the Children’s Plans’ claims, the relief they seek, and the contours
of the ultra vires doctrine. Consequently, the briefing before the Court is largely
directed at strawman arguments that distract rather than illuminate.
1. The Children’s Plans have standing.
The Children’s Plans have standing because they have shown (1) a concrete
and particularized injury (business disruption and probable dissolution) (2) that is
fairly traceable to the defendant’s conduct (an unlawful procurement) and
(3) redressable by the relief sought (an injunction to prevent the procurement’s
further implementation). See Data Foundry, Inc. v. City of Austin, 620 S.W.3d 692,
696 (Tex. 2021). The Commissioner does not argue that any of these factors have
not been met. Rather, her challenge depends on mischaracterizing the Children’s
Plans’ claims as seeking retrospective relief—setting aside the procurement.
Commissioner.Br.23-25. But the Children’s Plans seek only prospective relief to halt
the Commissioner from the continued unlawful implementation of the procurement.
They do not seek to dictate how the Commissioner remedies that illegality.
30
The Commissioner’s reliance on standing analysis from federal bid-protest
cases is thus misplaced, but that authority nevertheless cuts against her. In some bid-
protest cases—say, where a challenge addresses an isolated scoring issue—a
protesting party might, as the Commissioner contends, lack standing because the
error could not have affected the procurement’s outcome or “caused [the protestor]
to be passed over.” Id. at 23. But in a more comprehensive challenge to a
procurement like this one, “a bid protester has standing when, assuming its protest
is successful, it would have an opportunity to participate in a new procurement.”
VAS Realty, LLC v. United States, 26 F.4th 945, 949 (Fed. Cir. 2022); see also, e.g.,
Tinton Falls Lodging Realty, LLC v. United States, 800 F.3d 1353, 1358 (Fed. Cir.
2015) (bid protester can establish standing “by showing that it was an actual or
prospective bidder whose direct economic interest would be affected by the award
of the contract or by failure to award the contract”). Likewise, bidders for
government contracts who allege endemic illegality have standing to seek “forward-
looking relief” if they plan to bid on future contracts that would contain the same
challenged infirmity. Adarand Constructors, Inc. v. Peña, 515 U.S. 200, 210-11
(1995). Even if this were the applicable standard, the Children’s Plans met it by
31
demonstrating (as the trial court found) pervasive statutory and regulatory violations
infecting the entire procurement, thus rendering the results unlawful.12
While helpful to the Children’s Plans, this standing analysis is ultimately
irrelevant. Whether a “clear and prejudicial” violation must be shown to “set aside a
procurement decision,” Commissioner.Br.23 (quoting Elcon Enters., Inc. v. Wash.
Metro. Area Transit Auth., 977 F.2d 1472, 1478 (D.C. Cir. 1992)), is immaterial here
because the Children’s Plans do not request that relief. Instead, they seek to enjoin
future unlawful acts by the Commissioner that would perpetuate the unlawful acts
that have already occurred. The Commissioner does not and cannot suggest the
Children’s Plans lack standing to secure prospective relief given the injuries inflicted
on them by the unlawful procurement and their intention to participate in future
procurements (including the pending STAR Kids procurement). Infra at 50-52; see
also, e.g., Lazarides v. Farris, 367 S.W.3d 788, 801 (Tex. App.—Houston [14th
Dist.] 2012, no pet.) (applying, in ultra vires context, “general rule [that], to have
12
That the plaintiff MCO in Wilson v. Community Health Choice Texas, Inc.,
607 S.W.3d 843 (Tex. App.—Austin 2020, pet. denied) was able to point to a single
dispositive error in that procurement as “the only entity qualifying for a mandatory
contract award,” Commissioner.Resp.23, was merely a factual quirk—not a bright-
line prerequisite for seeking prospective relief in a procurement challenge.
32
standing[,] an individual must demonstrate a particularized interest in a conflict
distinct from that sustained by the public at large”).13
2. The Children’s Plans’ claims are ripe.
The Commissioner erroneously contends that the Children’s Plans’ ultra vires
claims are not ripe because she could still decide their bid-protest appeals in their
favor. Commissioner.Br.11-14; see also Aetna.Br.9-14; Molina.Br.52-54. However,
the theoretical possibility she might suddenly reverse course, disavow all her prior
briefing in this case, and grant the appeals does not affect whether their ultra vires
claims are ripe now. In determining ripeness, “courts must consider whether, at the
time a lawsuit is filed, the facts are sufficiently developed so that an injury has
occurred or is likely to occur, rather than being contingent or remote.” Patel v. Tex.
Dep’t of Licensing & Regulation, 469 S.W.3d 69, 78 (Tex. 2015) (emphasis added).
Here, the record shows both.
First, injury has already occurred in the form of disruptions to the Children’s
Plans’ businesses, loss of staff, and difficulty filling positions caused by the
uncertainty of whether the Commissioner will implement the notice of intent to
13
Relatedly, Molina—but not the Commissioner—argues the Children’s Plans
lack contractual rights and, “[w]ith no rights at stake,” they “may not invoke the ultra
vires exception to sovereign immunity.” Molina.Br.17. But any lack of contractual
“rights” is irrelevant. The basis for the Children’s Plans’ ultra vires claims is not a
contractual right but “a private party’s rights against a state official who has acted
without legal or statutory authority.” Heinrich, 284 S.W.3d at 368. The Children’s
Plans’ standing grants them sufficient interest to assert their ultra vires claims.
33
award the STAR & CHIP contracts. Infra at 50-52. That harm, by itself, is sufficient
to establish that the Children’s Plans’ claims are ripe. See Abbott v. Doe, 691 S.W.3d
55, 75-76 (Tex. App.—Austin 2024, no pet.) (ultra vires claims were ripe and did
not require final agency determination where parties had already experienced harm).
Second, the Commissioner’s actions illustrate that additional harm is likely to
occur because she will deny the Children’s Plans’ bid-protest appeals. The
Commissioner conceded that she signed off on a February 2024 action memo
requesting her approval to issue the notice of intent to award despite knowing it
would eliminate the Children’s Plans. 6.RR.140; 12.RR.PX.284. She even testified,
that “I actually wanted to try to find a way to add them back in, but I couldn’t—I
couldn’t come up with a principled way to do it[.]” 6.RR.141. Moreover, the
challenges to the procurement’s legality in the Children’s Plans’ bid-protest appeals
mirror the challenges the trial court sustained in the temporary injunction, which the
Commissioner contested below and continues to vigorously oppose in this appeal.
Compare, e.g., CR.5793-827 (Texas Children’s bid-protest appeal), and CR.5877-
79 (rulings in temporary injunction sustaining challenges to procurement’s legality),
with Commissioner.Br.17-38. The Commissioner’s opposition to the Health Plans’
request for more time to file their response briefs in this appeal erases any doubt that
she intends to deny the bid protest appeals: She justified her opposition on the ground
that the Health Plans should not receive any further payments “for contracts they did
34
not win” and “to which they ha[ve] no entitlement.”
Commissioner.Resp.2nd.MFET.2 (emphasis added) (describing the Health Plans’
case as “meritless”).14
This evidence of both prior and impending injury is more than sufficient to
establish the ripeness of the Children’s Plans’ ultra vires claims. See, e.g., City of
Houston v. Norcini, 317 S.W.3d 287, 291 (Tex. App.—Houston [1st Dist.] 2009,
pet. denied) (in reviewing ripeness challenge, court “must take as true all evidence
favorable to the plaintiff and indulge every reasonable inference and resolve any
doubts in [plaintiff’s] favor” (citation modified)).
The Commissioner also contends that, “[w]hen a plaintiff alleges that an
agency has incorrectly applied the law governing the subject of its dispute, that claim
is not ripe if the plaintiff has not availed himself of the available recourse under that
law.” Commissioner.Br.15 (citing Riner v. City of Hunters Creek, 403 S.W.3d 919,
923-24 (Tex. App.—Houston [14th Dist.] 2023, no pet.); Marble Falls ISD v. Scott,
275 S.W.3d 558, 567 (Tex. App.—Austin 2008, pet. denied)). The cited cases are
readily distinguishable because they did not involve ultra vires claims, which do not
require exhaustion of any relevant administrative remedies. Infra at 37-40. Indeed,
14
The Commissioner argues that the Court must presume she will consider the
bid-protest appeals in good faith. Commissioner.Br.13-14; Aetna.Br.14. Any such
presumption has been conclusively rebutted by her filings in this Court
unequivocally arguing the procurement was lawfully conducted.
35
the very nature of ultra vires claims demonstrates why the Children’s Plans’ claims
are ripe. Forcing the Children’s Plans to wait for her decision on their bid-protest
appeals would allow the Commissioner to ink contracts with the intended MCOs
before the Children’s Plans could stop her—which she testified she would do.15
Ultra vires claims brought at that point would be open to challenge on both mootness
and immunity grounds, since rescinding executed contracts might be construed as
improperly retrospective relief. See Heinrich, 284 S.W.3d at 369 (limiting ultra vires
claims to equitable prospective relief).
These concerns are not merely hypothetical, as the Commissioner’s
predecessor took similar steps and made similar arguments during an earlier
procurement challenge. In Wilson v. Community Health Choice Texas, Inc., a prior
commissioner “executed and officially awarded” the announced procurement
contracts in the midst of ultra vires litigation challenging that procurement—and
then argued the contract execution rendered the case moot. 607 S.W.3d 843, 848
(Tex. App.—Austin 2020, pet. denied). The Commissioner might attempt the same
gambit here.
15
See 6.RR.132 (“[A. O]nce that [bid protest] is finished, then I would move
forward.”); 6.RR.147 (“Q. And if you were to deny those appeals, then you could
execute the contracts immediately at any time after denying those appeals; right?
A. Yes, ma’am.”); id. (“Q. But there wouldn’t be any waiting period or time period.
You could execute the contracts immediately after denying the appeals? A. Yes,
that’s correct[.]”).
36
Ultimately, “[r]ipeness concerns not only whether a court can act—whether
it has jurisdiction—but prudentially, whether it should.” Perry v. Del Rio, 66 S.W.3d
239, 249-50 (Tex. 2001) (“In assessing ripeness, … a court is required to evaluate
both the fitness of the issues for judicial decision and the hardship to the parties of
withholding court consideration.” (citation modified)). And here, the Court not only
can act but should. The Commissioner has given every indication that she will deny
the Children’s Plans’ bid-protest appeals and sign the contracts in question
immediately thereafter, resulting in catastrophic harm to the Children’s Plans and
their members—thus justifying judicial action to preserve the status quo while this
suit is litigated on the merits.
3. The exhaustion-of-remedies doctrine does not apply.
Relatedly, the Commissioner, Aetna, and Molina erroneously argue the
Children’s Plans cannot bring their ultra vires claims unless and until the
Commissioner first decides the bid-protest appeals. Commissioner.Br.14-16;
Aetna.Br.9-14; Molina.Br.52-54. Texas law, however, does not require a plaintiff to
exhaust administrative remedies before filing ultra vires claims. See, e.g., Kilgore
ISD v. Axberg, 535 S.W.3d 21, 34 (Tex. App.—Texarkana 2017, no pet.) (noting
that “there are exceptions to the exhaustion-of-remedies doctrine,” including “when
an administrative agency purports to act outside its statutory powers”); Brennan v.
City of Willow Park, 376 S.W.3d 910, 921-22 (Tex. App.—Fort Worth 2012, pet.
37
denied) (parties were not required to pursue any type of protest procedure where
they alleged agency acted outside its statutory powers); Smith v. Abbott, 311 S.W.3d
62, 80 (Tex. App.—Austin 2010, pet. denied) (noting that “administrative
exhaustion is not required” where declaratory judgment claims “allege acts ultra
vires of [defendant’s] statutory authority” (citing Westheimer ISD v. Brockette, 567
S.W.2d 780, 789 (Tex. 1978))). The Commissioner cites no authority to the
contrary.16
This makes sense. Requiring exhaustion of administrative remedies would be
fundamentally incompatible with the ultra vires cause of action, which is limited to
prospective relief and is not a review of a final agency decision. Moreover, ultra
vires claims are common-law claims, and exhaustion is not a general precondition
to suit in district court absent a statute establishing an exhaustion requirement. See
Cash Am. Int’l Inc. v. Bennett, 35 S.W.3d 12, 15 (Tex. 2000) (“When exhaustion is
required, courts may review the administrative action only at the time and in the
manner designated by statute.” (emphasis added)). “A Texas district court … is a
16
The cases cited by the Commissioner and Molina, see Commissioner.Br.14;
Molina.Br.53, are inapposite because they did not involve ultra vires claims. Molina
also undermines its own argument by citing Janek v. Gonzalez, where the Third
Court expressly recognized “the ultra-vires exception to the doctrine of sovereign
immunity and to the exhaustion requirement.” No. 03-11-00113-CV, 2013 WL
1748795, at *9 (Tex. App.—Austin Apr. 17, 2013, no pet.). This exception did not
help the Janek plaintiff because he failed to plead proper ultra vires claims, id. at
*7-9, whereas the Children’s Plans have done so here, supra at 14-30.
38
court of general jurisdiction,” and “the presumption is that [such courts] have subject
matter jurisdiction unless a showing can be made to the contrary.” Dubai Petroleum
Co. v. Kazi, 12 S.W.3d 71, 75 (Tex. 2000). “Thus, all claims are presumed to fall
within the[ir] jurisdiction … unless the Legislature or Congress has provided that
they must be heard elsewhere.” Id. (citation modified). “Something unmistakable
must be present to displace the strong presumption of jurisdiction” and, “[a]bsent a
compelling showing to the contrary,” it is “presume[d] that … the jurisdiction of a
district court—our state’s sole court of general jurisdiction—remains undisturbed.”
S.C. v. M.B., 650 S.W.3d 428, 436, 444 (Tex. 2022).
As an exception to this “strong presumption,” exhaustion applies only where
the Legislature has made it a prerequisite to jurisdiction. The most prominent
examples are review of administrative decisions under the Administrative Procedure
Act (“APA”), see, e.g., Tex. Dep’t of Protective & Regul. Servs. v. Mega Child Care,
Inc., 145 S.W.3d 170, 173 (Tex. 2004), and where an agency is assigned exclusive
jurisdiction, see, e.g., In re Oncor Elec. Delivery Co., 630 S.W.3d 40, 44-45 (Tex.
2021) (orig. proceeding). No such exception applies here, and the Commissioner
cites none.
First, disputes that fall under HHSC’s procurement regulations are
specifically carved out of the APA because bid protests (and any internal appeals)
are not defined as “contested cases” under the APA. See 1 TEX. ADMIN. CODE
39
§ 391.303(d) (“HHSC will not consider protests filed pursuant to this subchapter as
contested cases under the [APA].”) (App.Tab.17).
Second, because it is presumed that a district court has subject-matter
jurisdiction, “the burden to demonstrate that exclusive jurisdiction rests with an
administrative agency falls on the party resisting the district court’s jurisdiction.”
Oncor Elec., 630 S.W.3d at 44-45.17 The Commissioner does not meet that burden.
She identifies no statute that expressly or impliedly removes these ultra vires claims
from the trial court’s general jurisdiction, and she cannot impose an exhaustion
requirement where none exists.18
4. The Children’s Plans properly sued the Commissioner.
Aetna claims the Children’s Plans improperly sued the Commissioner because
she did not directly engage in earlier conduct such as designing the procurement or
17
The Commissioner claims that, “when an available administrative remedy
‘may moot the claim … the claim is barred.’” Commissioner.Br.14-15 (quoting
Hensley v. State Comm’n on Jud. Conduct, 692 S.W.3d 184, 194 (Tex. 2024)).
Hensley, however, hurts the Commissioner more than it helps because the Supreme
Court held that the exhaustion-of-remedies doctrine did not bar the plaintiff’s ultra
vires claim. See 692 S.W.3d at 198.
18
Even if exhaustion were required here (which it is not), “[f]utility is a
recognized exception to the exhaustion of administrative remedies.” Ogletree v.
Glen Rose ISD, 314 S.W.3d 450, 454 (Tex. App.—Waco 2010, pet. denied). Under
this exception, a party “must show that it is certain that the claim will be denied on
appeal,” id., and as shown above, supra at 34-37, the Commissioner’s own testimony
and full-throated opposition to the merits of Plaintiffs’ ultra vires claims render her
denial of the bid-protest appeals a foregone conclusion.
40
scoring the bids. Aetna.Br.14-19. Tellingly, only Aetna—not the Commissioner—
makes this argument, which is based on a fundamental misunderstanding of not only
ultra vires claims generally but also the prospective relief the Children’s Plans seek.
In Heinrich, the Supreme Court directly addressed the proper parties in ultra
vires actions, noting that “a judgment against a public servant in his official capacity
imposes liability on the entity that he represents” and “a suit against a state official
is merely another way of pleading an action against the entity of which [the official]
is an agent.” 284 S.W.3d at 373 (citation modified and emphasis added). The
Children’s Plans seek only prospective relief, and the only person left to act is the
Commissioner. The Children’s Plans’ ultra vires claims do not seek relief regarding
past procurement conduct undertaken by other HHSC personnel. Instead, they seek
to enjoin the Commissioner’s rejection of their bid-protest appeals and execution of
contracts with the presumptive awardees. See CR.5883 (enjoining the Commissioner
from “awarding, signing, entering into, executing, implementing, or otherwise
taking action to effectuate or perform any contracts resulting from or in connection
with the STAR & CHIP RFP or to further the procurement or contracting processes
for the STAR & CHIP RFP”). Such conduct falls within the Commissioner’s
purview, not her subordinates’. See Hall, 508 S.W.3d at 239 (ultra vires doctrine
requires “pinpointing which official has the duty to act”); TEX. GOV’T CODE
§ 524.0002(b)(4) (granting Commissioner authority over and responsibility for
41
“contracting, purchasing, and related policies”) (App.Tab.18); 1 TEX. ADMIN. CODE
§ 391.307(d) (“A decision issued in writing by the HHSC Executive Commissioner
shall be the final administrative action of HHSC on a protest determination that is
appealed under this subchapter.”) (App.Tab.19).
In sum, unlike Hall—where a plaintiff sued “a nominal, apex representative
who ha[d] nothing to do with the allegedly ultra vires actions”—the Children’s Plans
properly sued the Commissioner “to compel [her] to follow [her] governing
authority,” and their claims are “confined to conduct pursuant to [her] authority.”
508 S.W.3d at 240 (emphasis omitted).
5. The Commissioner’s authority is limited by statutory criteria
and requirements.
The Commissioner asserts that her authority over a $120 billion procurement
is virtually absolute. Commissioner.Br.17-18; see also Molina.Br.35-52. But she
ignores the express limits on her authority in the very statutes that enable her to
conduct the procurement. As discussed above, supra at 14-15, Houston Belt
contrasted absolute and limited discretion, explaining that “government officers
charged with administration can[not] perform their duties ‘in conflict with the plain
language of [their enabling] statute’ whenever they might please with no threat of
judicial review.” 487 S.W.3d at 163 (second alteration in original) (quoting Klumb
v. Hous. Mun. Emps. Pension Sys., 458 S.W.3d 1, 9 (2015)). The statutes and
regulations requiring the Commissioner to apply mandatory considerations clearly
42
limit the absolute discretion she erroneously claims to possess in determining “best
value” under Section 2155.144. See Wilson, 607 S.W.3d at 846-47 (stating that
HHSC must comply with Section 2155 and, “[i]n addition to adhering to those
general requirements, [] must implement the Medicaid managed care program by
contracting with MCOs in a manner consistent with chapter 533 of the Government
Code”). While she might have some discretion in how to apply those requirements,
she lacks discretion to wholly ignore them.19
Nor, for that matter, does the Commissioner retain the discretion to
misinterpret Texas law. See, e.g., Chambers-Liberty Cntys. Navigation Dist. v. State,
575 S.W.3d 339, 354 (Tex. 2019) (government officials “do not have discretion to
misinterpret state statutes constricting their authority”). This case is not like Hall,
where the allegedly ultra vires act involved an official’s interpretation of “federal
privacy law—a law collateral to [his] authority.” 508 S.W.3d at 242. Instead, this
case is analogous to Houston Belt, where the law “authorizing the [defendant] to act
commanded him to make … determination[s]” using a specific methodology and
therefore act “subject to explicit constraints”—which he disregarded, thus acting
19
This reasoning also undermines the Commissioner’s attempt to distinguish
this case from Smith, where the Third Court concluded administrative exhaustion
was not required in the ultra vires context. See 311 S.W.3d at 80. Just as the state
agency there “could not delegate its statutory authority to suspend drivers licenses
to the State Office of Administrative Hearings because SOAH had no such statutory
authority,” Commissioner.Br.16, so too does the Commissioner lack statutory
authority to undertake procurements while disregarding mandatory considerations.
43
outside his limited discretion. Id. at 241-42. “Neglecting one of those constraints
was what made the [the challenged] determination—whether right or wrong—ultra
vires.” Id. at 242. Here, the very laws that empower the Commissioner to award
Medicaid contracts similarly include multiple “specific, substantive, [and] objective
standards” to guide that process, Hous. Belt, 487 S.W.3d at 161—which, the trial
court found, the Commissioner disregarded in this procurement. CR.5876-79.20
6. The Children’s Plans do not seek an improper “redo” of the
procurement.
Lastly, the Commissioner asserts that the Children’s Plans seek a retrospective
“redo” remedy for her allegedly unlawful conduct, but she does not and cannot cite
any request for such relief in the Children’s Plans’ pleadings. Commissioner.Br.38-
43.21 There is none. Rather, the Children’s Plans seek to enjoin the Commissioner
from continuing to engage in unlawful conduct in the future—and that is the
20
While the Children’s Plans strenuously disagree with the substantive results
of the procurement, that is not the basis for their ultra vires claims. Rather, it is the
Commissioner’s disregard of mandatory considerations that have rendered and will
continue to render the procurement unlawful.
21
All the Commissioner cites is a declaration by an expert for Superior.
Commissioner.Br.31 (citing CR.3279). But that expert merely expressed her opinion
that “[t]he only remedy that can cure” the Commissioner’s unlawful disclosure of
Superior’s proposals to competitors during the procurement—which is just one of
the many ultra vires acts committed by the Commissioner—“is to cancel the Notice
of Intent to Award and to redo the entire process.” CR.3279. Whether the
Commissioner pursues that course of action is yet to be seen, but redoing the
procurement is not relief the Children’s Plans have sought.
44
prospective relief the trial court granted. CR.5876 (“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[.]”); CR.5883 (granting prospective relief only).
The Commissioner cites In re Stetson Renewables Holdings, LLC, 658
S.W.3d 292, 297 (Tex. 2022) (orig. proceeding), and Morath v. Kingsville ISD, 710
S.W.3d 918, 925 (Tex. App. [15th Dist.] 2025, no pet.), in support of her argument.
Commissioner Resp.39-41. Both cases are inapposite. Neither held that a common-
law ultra vires claim may be asserted only when the Legislature expressly provides
a judicial remedy. Nor did either hold that an ultra vires claim must be dismissed
unless it seeks a remedy expressly authorized by the statute allegedly violated. The
Children’s Plans’ ultra vires claims merely seek to prohibit the Commissioner from
further violating established statutory mandates, and the Supreme Court has held
such prospective injunctive relief is a proper remedy for ultra vires conduct. See,
e.g., Heinrich, 284 S.W.3d at 368-69 (governmental immunity “does not preclude
prospective injunctive remedies in official-capacity suits against government actors
who violate statutory … provisions”).
The Commissioner further argues (incorrectly) that, when the Children’s
Plans agreed to the terms of the solicitation by submitting their proposals, they
45
“waived any claim of an ongoing violation of their rights not to be subjected to an
unlawful process” and that “[i]t was at that point the nature of any relief the Court
could have granted became retrospective for purposes of ultra vires law.”
Commissioner.Resp.41. Both parts of the Commissioner’s argument are wrong.
First, the Children’s Plans’ claims are based on their objections to the
Commissioner’s subsequent execution of the procurement—after they and the other
MCOs submitted their proposals—that violated the Commissioner’s guarantee in the
solicitation that “[p]roposals shall be evaluated in accordance with State law,
including but not limited to, applicable provisions of Chapters 533, 536, and 2155
of the Texas Government Code.” 9.RR.PX.38 at 21 (emphasis added). The
Children’s Plans had no reason to think the Commissioner would violate that
guarantee. See 5.RR.85 (testimony by Ms. Molina that “it was reasonable … for a
bidder to—or prospective bidder to understand that the agency would in fact comply
with” these statutory provisions); cf. EIS Dev. II, LLC v. Buena Vista Area Ass’n,
715 S.W.3d. 689, 699 (Tex. 2025) (“Waiver is an intentional relinquishment of a
known right or intentional conduct inconsistent with claiming that right.” (citation
modified and emphasis added)). The Children’s Plans, of course, could not have
challenged the Commissioner’s broken promises before their proposals were even
submitted. Consequently, the provision requiring pre-solicitation bid protests to the
content of the RFP itself, 9.RR.PX.38, is irrelevant.
46
Second, the Commissioner fails to explain how the Children’s Plans’ alleged
waiver of objections to the contents of the solicitation can somehow convert a claim
for remedial action as to future conduct that has not occurred into a claim for
retrospective relief. Based on the definitions of retrospective and prospective relief
contained in the very case the Commissioner cites on this point, the Children’s Plans’
ultra vires claims seeking to prohibit the Commissioner from taking further unlawful
action—on their face—are not attempts to “remedy past violations” but rather to
“compel[] legal compliance going forward.” City of Austin v. Util. Assocs., Inc., 517
S.W.3d 300, 309 (Tex. App.—Austin 2017, pet. denied).
⁎⁎⁎
In sum, the Children’s Plans do not suggest the Commissioner merely “made
a mistake or ‘got it wrong’” when making decisions she is “statutorily empowered
to make.” Commissioner.Br.17 (quoting Util. Assocs., 517 S.W.3d at 310). Instead,
they contend, the record confirms, and the trial court ruled that the Commissioner
engaged in textbook ultra vires conduct by completely disregarding statutory
mandates and unlawfully “exercis[ing] discretion without reference to or in conflict
with the constraints of the law authorizing [her] to act.” Id. at 18 (second alteration
in original) (quoting Hall, 508 S.W.3d at 241). And the Commissioner herself
acknowledged on the stand that these violations are ongoing because the
procurement is not yet complete, 6.RR.128 (“[Q.] Mr. Ramirez testified earlier that
47
the procurement is ongoing. You would agree with that? A. Yes, sir.”)—
underscoring that the Children’s Plans properly seek prospective relief only.
II. The trial court did not abuse its discretion in granting a temporary
injunction.
“Whether to grant or deny a temporary injunction is within the trial court’s
sound discretion.” Butnaru v. Ford Motor Co., 84 S.W.3d 198, 204 (Tex. 2002). The
reviewing court may reverse an order granting a temporary injunction “only if the
trial court abused that discretion” and “must not substitute its judgment for the trial
court’s judgment unless the trial court’s action was so arbitrary that it exceeded the
bounds of reasonable discretion.” Id. When the grant of a temporary injunction is
based on disputed questions of fact—as in this case—the reviewing court should not
disturb the trial court’s order if it “is based on conflicting evidence,” Daniel v. Goesl,
341 S.W.2d 892, 894 (Tex. 1960), and should “draw all legitimate inferences from
the evidence in a manner most favorable to the trial court’s judgment,” Tanguy v.
Laux, 259 S.W.3d 851, 856 (Tex. App.—Houston [1st Dist.] 2008, no pet.).
As demonstrated above, the record establishes the Commissioner has acted
and will continue to act outside the scope of her lawful authority. Supra at 16-30.
Accordingly, the trial court’s ruling that the Children’s Plans had a probable right to
relief on their ultra vires claims was grounded in the evidence and not arbitrary at
all—let alone so arbitrary that it exceeded the bounds of reasonable discretion. Nor
did the trial court abuse its discretion in ruling that the Children’s Plans have suffered
48
and will suffer irreparable harm and that the balance of equities supports a temporary
injunction.
A. The temporary injunction seeks to preserve the status quo by
preventing further unlawful conduct by the Commissioner.
At the outset, both the Commissioner and Molina argue the trial court’s
temporary injunction upsets rather than preserves the status quo, variously claiming
the “last actual, peaceable, non-contested status which preceded the pending
controversy” was the time before the Commissioner issued the notice of intent to
award, Commissioner.Br.45, or that the status quo is the Commissioner’s “exercis[e
of] her authority” to undertake procurements, Molina.Br.55. Both theories are based
on a fundamental misunderstanding of the Children’s Plans ultra vires claims. The
Children’s Plans solely seek prospective relief to prohibit the Commissioner from
engaging in further unlawful conduct (like executing new STAR & CHIP contracts
with the presumptive awardees). Thus, the status quo the temporary injunction
preserves is the current status of the procurement at the time the injunction issued.
What’s clear is that the status quo the Children’s Plans seek to preserve cannot
be the time before the Commissioner issued the notice of intent to award because
their forward-looking ultra vires claims do not seek to undo that act. It has already
occurred and is beyond the scope of the Children’s Plans’ requested relief. Nor can
the status quo be the mere exercise of the Commissioner’s authority, which makes
no sense on its face—particularly since that would have required the Children’s
49
Plans to seek a temporary injunction before the Commissioner took any action in the
procurement and before the Children’s Plans could have discovered the subsequent
unlawful conduct underlying their ultra vires claims.
B. The Children’s Plans and their members face imminent,
irreparable harm if the temporary injunction is reversed.
The Commissioner does not and cannot dispute that, if her unlawful conduct
is allowed to continue while the Children’s Plans ultra vires claims are being
litigated—for example, if she is allowed to execute new STAR & CHIP contracts
with the presumptive awardees—the Children’s Plans and their members will suffer
the irreparable harm they proved and the trial court found. CR.5879-80.
1. The continued viability of the Children’s Plans is at risk.
Because the Children’s Plans were founded in conjunction with Texas’s
rollout of Medicaid managed care and CHIP to partner with the State and ensure
access to high-quality care for beneficiaries, the STAR & CHIP contracts are the
Children’s Plans’ raison d’être. Loss of those contracts thus poses an existential
threat to their continued viability because that is all they do. 8.RR.35-36, 129-30,
133, 159, 176-77. While the Children’s Plans also operate STAR Kids programs, if
they lose their much larger STAR & CHIP contracts, then they will lose the vast
majority of their Medicaid members and most of their revenue and it is unlikely they
will be able to continue their operations. 8.RR.35-36, 39, 159-60. This threat of
dissolution justifies injunctive relief. See, e.g., Frequent Flyer Depot, Inc. v. Am.
50
Airlines, Inc., 281 S.W.3d 215, 228 (Tex. App.—Fort Worth 2009, pet. denied)
(“Disruption to a business can be irreparable harm.”); TrueEX, LLC v. MarkitSERV
Ltd., 266 F. Supp.3d 705, 727 (S.D.N.Y. 2017) (“[M]ajor disruption of a business
can be as harmful as termination, and a threat to the continued existence of a business
can constitute irreparable injury.” (citation modified) (quoting Nemer Jeep-Eagle,
Inc. v. Jeep-Eagle Sales Corp., 992 F.2d 430, 435 (2d Cir. 1993))).
At a minimum, the loss of the STAR & CHIP contracts will cause catastrophic
job losses—including for many single mothers—even if the Children’s Plans
somehow survive. 8.RR.35, 40, 159-61. The risk of job losses also constitutes
irreparable harm. See, e.g., Tex. Dep’t of State Health Servs. v. Holmes, 294 S.W.3d
328, 334 (Tex. App.—Austin 2009, pet. denied) (affirming temporary injunction
where applicant testified that, absent relief, “she would be forced to lay off
employees and could potentially go out of business”).
Notably, the Children’s Plans’ operations have already been compromised by
the Commissioner’s notice of intended contract awards—disruption that threatens
the Children’s Plans’ ability to fulfill even their current obligations and could
escalate into a death spiral if the Commissioner is allowed to execute the contracts
and finalize the procurement. The Children’s Plans are still under contract to provide
STAR & CHIP services through at least August 31, 2026, but uncertainty about
future contracts will likely cause current members to consider switching plans. And
51
if the presumptive awardees of STAR & CHIP contracts begin to ramp up operations
in the Harris, Jefferson, and Tarrant Service Areas, they will likely poach the
Children’s Plans’ experienced STAR & CHIP employees (who are justifiably afraid
their current jobs will soon vanish) while the existing contracts are still in effect,
CR.3140-41, further jeopardizing the Children’s Plans’ operations and ability to
provide care to their members.
Furthermore, after HHSC issued its preliminary award, the Children’s Plans’
members and providers were confused about whether Cook Children’s would
continue to operate, requiring its staff to expend time and effort to clarify the impact
of the announced procurement results. 8.RR.160. Notably, Cook Children’s was
unable to hire a director of network management, a critical position, because
multiple qualified candidates turned down the position to seek more stable
opportunities elsewhere. Id. And Texas Children’s has suffered and will continue to
suffer disruption in its workforce as its employees voice concerns about their job
security in light of the intended contract awards. CR.3140. Such disruption,
uncertainty, delay, diminished customer service, and reputational injury all weigh
powerfully in favor of temporary injunctive relief. See, e.g., Intercont’l Terminals
Co. v. Vopal N. Am., Inc., 354 S.W.3d 887, 895-96 (Tex. App.—Houston [1st Dist.]
2011, no pet.).
52
2. The imminent risk of irreparable harm extends to
beneficiaries.
Courts have recognized “the public interest [] in … ensuring continuing health
care to members of the public” when granting injunctive relief. Welch v. Brown, 551
F. App’x 804, 814 (6th Cir. 2014) (affirming preliminary injunction); see also Leddy
v. Becerra, 617 F. Supp. 3d 116, 125 (E.D.N.Y. 2022) (“As the involuntary closure
of the subject medical practice would severely, if not irrevocably, harm thousands
of patients receiving medical care, the public interest overwhelmingly favors
issuance of a TRO.”). Here, the Children’s Plans’ members are at imminent risk of
irreparable harm if the Commissioner’s unlawful conduct is allowed to continue.
HHSC officials concede that, if the STAR & CHIP contracts are awarded as
announced, more than 1.5 million Texans will be forced to switch health plans, and
many of those will also have to find new healthcare providers. 5.RR.190; 6.RR.97-
98; 7.RR.38-39. Texas Children’s serves approximately 420,000 members—more
than 40% of the members in the Harris and Jefferson Service Areas. 8.RR.39;
9.RR.PX.38 at 29-30. Cook Children’s serves 115,000 members—approximately
40% of the members in the Tarrant Service Area. 8.RR.133; 9.RR.PX.38 at 29.
These members, some of Texas’s most vulnerable children and expectant mothers,
rely on the Children’s Plans and their networks of providers for their healthcare.
8.RR.162. Because MCO networks are not identical, 7.RR.118-19, some Medicaid
members who are forced to change plans will lose access to primary-care providers,
53
specialty-care providers, or both. For some, this disruption will occur as they are
battling life-threatening illnesses and navigating the hardships of economic
disadvantage and marginalization. Unsurprisingly, research demonstrates that
forcing Medicaid beneficiaries to change providers has negative consequences,
including fewer primary-care visits and increased hospitalizations for patients with
chronic conditions. See generally Becky Staiger, Disruptions to the Patient-Provider
Relationship and Patient Utilization and Outcomes: Evidence from Medicaid
Managed Care, 81 J. HEALTH ECON. 102574 (2022).
Although HHSC rules require new plans to cover care by existing providers
for up to ninety days and honor prior authorizations for a set period of time, these
safeguards (while laudatory) can fall short in practice because they depend on timely
transfer of information between plans. This does not always occur, thus delaying and
disrupting care even when a single beneficiary voluntarily changes plans. 8.RR.162-
63, 174-75. Nor do these requirements protect members in all circumstances. One
stark example involves autism, which is diagnosed in roughly 4% of children
statewide. 8.RR.13. Applied behavioral analysis (“ABA”), a proven treatment for
autism in children aged three to five, requires a completed assessment before it is
covered. Id. But this assessment has a waitlist of seventeen months, and because it
is an assessment—not actual treatment—it is not covered by HHSC’s continuity-of-
54
care rules. 8.RR.13-14.22 A member on the waitlist who is forced to change plans
might therefore have to start “at the back of the line” on another provider’s waitlist,
id.—meaning an involuntary change in health plan can delay treatment for an autistic
child. Worse, because ABA treatment loses efficacy after age five, a delay of this
sort might prevent a child from receiving the benefit of ABA treatment altogether.
Id. That, too, is irreparable harm. See, e.g., Muth v. Voe, 691 S.W.3d 93, 109-18,
137-38 (Tex. App.—Austin 2024, pet. filed) (recognizing “the deprivation or
disruption of medically necessary care” as irreparable harm).
The loss of the Children’s Plans would be uniquely prejudicial to their
members because the Children’s Plans are much more than insurance companies.
Each is part of a local, nonprofit, integrated pediatric-healthcare organization, a
single coordinated system of providers, hospitals, and clinics. 8.RR.18-19, 33, 129-
30, 133-37. For members, this integration brings highly coordinated care not
available from other MCOs. Id. Integrated healthcare organizations provide more
efficient care with higher patient satisfaction than nonintegrated systems. 8.RR.34-
35, 137-38. And no other integrated pediatric-healthcare systems operate in the
Children’s Plans’ service areas. 8.RR.135. If the Children’s Plans are locked out of
STAR & CHIP contracts, every one of their 500,000-plus members will have to
22
Likewise, those rules do not apply to pregnancy care if the mother is at less
than twenty-four weeks’ gestation. 8.RR.23.
55
switch to plans that are not part of fully integrated systems, and the care they receive
will suffer as a result. Id. Many members would have to switch to Molina—the MCO
that scored highest in the procurement even though, by HHSC’s own admission, it
“does not meet quality of care measure minimum performance standards in any
of the programs it operates in.” 5.RR.262 (emphasis added). In the service areas
Texas Children’s serves, Molina’s quality metrics are lowest while Texas Children’s
boasts the highest. 8.RR.40-43. Other winning bidders in the Children’s Plans’
service areas—BCBS of Texas and Aetna—also score low on statewide quality
metrics. 8.RR.85-86.
3. The Commissioner cannot justify these irreparable harms.
The Commissioner makes no attempt to rebut this proof of irreparable injury.
Instead, she asserts in conclusory fashion that harm to contractual rights “can rarely
establish an irreparable injury,” Commissioner.Br.47, and offers a series of technical
arguments why she should be allowed to force the Children’s Plans out of business
and inflict irreparable harm on them and their members while this case is litigated.
First, the Commissioner argues that, having “los[t] a fair procurement-bidding
process,” the Children’s Plans cannot ask a court to redress the injuries caused by
the expiration of their current contracts. Commissioner.Br.46. This completely
misses the mark. The Children’s Plans’ claims are premised on the unlawfulness of
the procurement, the result of which has caused the irreparable harm described
56
above. This does not mean the Children’s Plans claim “a right to a new contract.”
Commissioner.Br.46. They do not. Rather, they simply assert any procurement that
leads to such contracts must be conducted lawfully.
Second, the Commissioner argues there is no irreparable harm because (1) the
Children’s Plans have not shown they have a right to a new contract and would have
received one but for the Commissioner’s unlawful conduct, (2) they can participate
in a later procurement, and (3) the harm could be repaired through bid-protest
appeals. Id. at 46-47; see also Molina.Br.55-56. This argument once more
misunderstands the Children’s Plans’ ultra vires claims. The claims are not
contingent on showing the Children’s Plans would have been awarded future
contracts, and that is not the relief they request. Instead, their claims are based on
the irreparable harm they and their members are suffering from the Commissioner’s
unlawful conduct and will suffer if the Commissioner’s unlawful conduct is allowed
to continue. Affirming the temporary injunction is the only way to prevent
irreparable harm from occurring by preserving the status quo until the case is
decided. It is also unclear how the Children’s Plans could participate in a later
procurement if they cease to exist due to the Commissioner’s actions, just as it is
unclear how the bid-protest appeals can confer any legal remedy when it is likely—
if not a foregone conclusion—the Commissioner will deny those appeals. Supra at
34-37. In short, the temporary injunction is the only way to prevent the irreparable
57
injuries to the Children’s Plans and their members from occurring because it will
preserve the status quo until their ultra vires claims are decided.
C. The balance of the equities overwhelmingly supports a temporary
injunction.
Given the Commissioner’s failure to refute the extraordinary, irreparable
harm the Children’s Plans and their 500,000-plus members will suffer if the
temporary injunction is reversed, the Commissioner faces the impossible task of
proving the trial court abused its discretion in balancing the equities in favor of
temporary injunctive relief. Under that standard of review, this Court cannot reverse
the trial court’s ruling unless it “was so arbitrary that it exceeded the bounds of
reasonable discretion” and cannot reverse simply because this Court would have
balanced the equities differently. Butnaru, 84 S.W.3d at 204.
The Commissioner first argues the temporary injunction infringes the State’s
right to enforce its own laws and thwarts a procurement it spent significant time and
resources implementing. Commissioner.Br.44-46. But the Supreme Court has held
that ultra vires claims exist for the very purpose of preventing a state official’s
unlawful execution of their duties, holding that “where those laws are being defied
or misapplied by a local official, an ultra vires suit is a tool to reassert the control of
the state.” State v. Hollins, 620 S.W.3d 400, 405 (Tex. 2020); see also Chambers-
Liberty, 575 S.W.3d at 348-49 (recognizing exception from sovereign immunity for
ultra vires claims). At the risk of stating the obvious, there is no legitimate public
58
interest in allowing the Commissioner to continue illegally inflicting irreparable
harm on the Children’s Plans and their members based on a patently unlawful
procurement. See, e.g., 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.”); Texas v. Biden, 10 F.4th 538, 560 (5th Cir. 2021) (noting that there
is “no public interest in the perpetuation of unlawful agency action”).
The Commissioner next suggests affirming the temporary injunction would
“greenlight any losing bidder to halt important government functions whenever they
are dissatisfied with the outcome,” hyperbolically adding that “Plaintiffs’ position
threatens the very structure of state government itself.” Commissioner.Br.48. The
Commissioner’s argument not only conflicts with Texas law holding that business
disruption may constitute irreparable harm, supra at 50-52, but plainly reaches too
far. If adopted, it would improperly insulate state officials who conduct
procurements from ultra vires actions, giving them free rein to violate procurement
laws enacted by the Legislature and preventing any judicial review or remedy.
Furthermore, a party can only obtain a temporary injunction by first establishing a
probable right to relief on its claims against the State and irreparable harm. While
the Children’s Plans have made such a showing, not all plaintiffs will. And once that
showing is made, allowing the State to continue violating the law and inflicting
irreparable harm does not justify preserving the status quo. See, e.g., In re Newton,
59
146 S.W.3d 648, 651 (Tex. 2004) (orig. proceeding) (“The plaintiffs argue that the
continuation of illegal conduct cannot be justified as preservation of the status quo,
and of course we agree.”); City of San Marcos, 714 S.W.3d at 245 (“Where the acts
sought to be enjoined constitute violation of the law … the status quo to be preserved
cannot be a continuation of those acts.”). The only genuine threat to “the very
structure of state government” in this case is giving the Commissioner the unchecked
discretion she is demanding without holding her accountable to the people her
unlawful conduct irreparably harms and the Legislature whose laws she violates.
The Commissioner next argues the equities militate against injunctive relief
because the Children’s Plans allegedly slept on their rights by failing to object to the
procurement’s solicitation before submitting their bid proposals.
Commissioner.Br.46-48; see also Molina.Br.57-58. However, as shown above, the
Children’s Plans could not have objected in advance to the Commissioner’s failure
to comply with her express promise in the solicitation to conduct the procurement in
accordance with Texas law. Supra at 46.
The Commissioner next argues the temporary injunction somehow harms
Texans “who rely on HHSC’s timely and efficient procurement of Medicaid and
CHIP funds” by “creat[ing] uncertainty.” Commissioner.Br.48. The exact opposite
is true. Affirming the temporary injunction allows Texans to continue receiving
essential care, without disruption, from the same providers through the same health
60
plans they have used for years until this lawsuit is resolved. CR.5882; 5.RR.181.
Allowing the unlawful procurement to continue, on the other hand, will cause the
Children’s Plans’ 500,000-plus members to lose access to the unique, mission-
driven, high-quality integrated pediatric-healthcare organizations that only the
Children’s Plans offer, supra at 9-11, 53-56, and that the undisputed evidence shows
is better for Medicaid beneficiaries, 8.RR.34-35, 137-38.
Finally, the Commissioner argues halting the issuance of the awards
contradicts Texas public policy, citing a statute stating “[i]t is the intent of the
Legislature that agencies and institutions minimize the use of extensions that extend
a contract beyond the base term and any optional extensions provided in a contract.”
Commissioner Resp. 50-51. But the statute does not say that contract extensions are
prohibited or against the public interest. It merely provides that contract extensions
should be minimized and, even then, does not explain when contract extensions
should and should not be granted. It strains credulity to conclude from this general
guidance that the Legislature would oppose the extension of an existing contract if
the proposed replacement contract was the product of the Commissioner’s unlawful
disregard of the Legislature’s own procurement laws.
D. The temporary injunction does not violate Texas Rule of Civil
Procedure 683.
The Commissioner incorrectly claims the trial court’s temporary injunction
violates Rule 683 because it does not include detailed findings of fact and
61
conclusions of law rebutting the Commissioner’s arguments against its issuance.
Commissioner.Br.51-53.
First, the Commissioner waived that objection. While Texas courts are
divided on whether noncompliance with Rule 683 may be raised for the first time on
appeal, the Third and Seventh Courts have held these objections are waived if not
preserved below. See, e.g., Taylor Hous. Auth. v. Shorts, 549 S.W.3d 865, 880 (Tex.
App.—Austin 2018, no pet.) (“Under this Court’s longstanding precedent, a
complaint of noncompliance with this requirement of Rule 683 is considered one of
form that is waived unless preserved before the trial court.”); Tex. Tech Univ. Health
Scis. Ctr. v. Rao, 105 S.W.3d 763, 768 (Tex. App.—Amarillo 2003, pet. dism’d)
(same). That accords with “general principles of sound judicial administration”
requiring “any objections to the form and content of an injunction be pointed out to
the trial court at a time when the errors could be corrected.” Rao, 105 S.W.3d at 768.
It also prevents gamesmanship, as it “serves no good purpose to permit appellants to
lie in wait and present this error in form for the first time on appeal.” Id.
Second, waiver aside, the Commissioner’s argument fails on the merits. Rule
683 requires that “[e]very order granting an injunction … shall set forth the reasons
for its issuance; shall be specific in terms; shall describe in reasonable detail and not
by reference to the complaint or other document, the act or acts sought to be
restrained.” The trial court’s order easily satisfies these requirements. It specifically
62
details the reasons for its issuance, identifying at least thirteen statutory mandates
the Commissioner “has violated and will continue to violate” and fourteen reasons
why the “execution and implementation of the contracts would result in irreparable
harm” to the Health Plans. CR.5877-82. The order also describes in reasonable detail
what the Commissioner is barred from doing: (1) “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 [procurement] or
to further the procurement or contracting processes for the STAR & CHIP
[procurement]”; and (2) “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 [procurement].” CR.5883.
The cases cited by the Commissioner are inapposite. The TRO in In re Luther
failed to identify “any particular state, county, or city regulation that [defendant]
violated, is threatening to violate, or is being commanded to stop violating.” 620
S.W.3d 715, 722 (Tex. 2021) (orig. proceeding) (per curiam). And the temporary
injunction in Independent Capital Management, LLC v. Collins, in a single sentence,
“simply set[] out the elements necessary for injunctive relief” and “d[id] not specify
the facts the trial court relied on.” 261 S.W.3d 792, 795-96 (Tex. App.—Dallas 2008,
no pet.). In contrast, the order here spans ten pages and amply details the grounds
63
for injunctive relief. CR.5875-84. Neither Rule 683 nor case law requires a
temporary injunction to expressly rebut the arguments against its issuance.
E. The trial court did not abuse its discretion in excluding the
procurement’s consensus scoring rubrics.
The Commissioner’s final argument is that the trial court erred by excluding
consensus scoring rubrics the Commissioner attempted to introduce on the last day
of the hearing, without proffering any witness who had personal knowledge of them.
Commissioner.Br.53-57. But the Commissioner’s claim that those rubrics were
“highly probative” contradicts the deposition testimony of HHSC’s corporate
representative, who swore not only that they were not the documents that would
reveal how the statutory preferences at the heart of this case were purportedly applied
but also that he had reviewed only one or two of the rubrics. 5.RR.228, 233-34;
6.RR.216.
For the exclusion of evidence to constitute reversible error, the complaining
party bears the heavy burden of showing “(1) the trial court did in fact commit error
and (2) that the error was reasonably calculated to cause and probably did cause the
rendition of an improper judgment.” Gee v. Liberty Mut. Fire Ins. Co., 765 S.W.2d
394, 396 (Tex. 1989). Evidentiary rulings are reviewed for abuse of discretion,
Owens-Corning Fiberglas Corp. v. Malone, 972 S.W.2d 35, 43 (Tex. 1998), which
occurs when the trial court acts without regard for any guiding rules or principles,
City of Brownsville v. Alvarado, 897 S.W.2d 750, 753-54 (Tex. 1995). The
64
reviewing court “must uphold the trial court’s evidentiary ruling if there is any
legitimate basis for the ruling,” Owens-Corning, 972 S.W.2d at 43, and “may not
substitute its own judgment for the trial court’s judgment,” Walker v. Gutierrez, 111
S.W.3d 56, 62 (Tex. 2003). To establish the ruling “probably resulted in an improper
judgment,” the complaining party must show the order “turns on the particular
evidence excluded or admitted” based on a review of the entire record. Alvarado,
897 S.W.2d at 753-54. That the ruling “might have” or “could have” resulted in an
improper order is not enough. Gunn v. McCoy, 554 S.W.3d 645, 671 (Tex. 2018).
Here, the Commissioner has shown neither error nor prejudice.
First, the trial court did not act without regard for guiding rules or principles
when it excluded the consensus scoring rubrics. The Commissioner suggests the
rubrics constitute “a business record, admissible under Texas Rule of Evidence
803(6).” Commissioner.Br.54. But this hearsay exception requires the three
conditions of admissibility—the record was made by someone with knowledge, the
record was kept in regular course of business, and making the record was a regular
practice—to be “shown by the testimony of the custodian or another qualified
witness.” TEX. R. EVID. 803(6)(D). Although the Commissioner claims “that is
precisely how HHSC offered the evidence,” Commissioner.Br.54, no such
foundation was actually laid. The portion of the record she cites for Mr. Ramirez’s
supposed familiarity “with the creation and maintenance of the scoring rubrics” is a
65
colloquy about the blank template scoring rubric generally, not the completed
rubrics the Commissioner elsewhere sought to admit—none of which Mr. Ramirez
created and only one or two of which he even reviewed. Id. at 55 (citing 20.RR.345-
46). Mr. Ramirez’s purported foundation could not have “substantially complie[d]”
with Rule 803(6) because such a foundation was never sought. McElroy v. Unifund
CCR Partners, No. 14-07-00661-CV, 2008 WL 4355276, at *3 (Tex. App.—
Houston [14th Dist.] Aug. 26, 2008, no pet.) (considering compliance of
foundational affidavit submitted for purpose of establishing business-records
exception). The trial court’s exclusion of hearsay evidence that lacked the necessary
foundation for admission under the business-records exception cannot be error.
Second, even if the exclusion was an abuse of discretion (it was not), any error
was harmless. The absence of detail in the Commissioner’s claim of prejudice is
telling. She conclusorily suggests “[i]t is difficult to conceive of how the case could
not turn on evidence of how the bidders’ proposals were scored,”
Commissioner.Br.57, but offers no support for her speculation. The Commissioner’s
failure underscores what Mr. Ramirez himself confirmed during his deposition as
HHSC’s designated representative: The consensus scoring rubrics are not probative
of whether the Commissioner applied the preferences and consideration at issue in
this case. When asked about documentary evidence of, for example, application of
the Section 536.052(d) preference, Mr. Ramirez indicated the only document
66
reflecting such a preference is the master rollup scoring sheet—not the various
consensus scoring rubrics. 8.RR.146-150; 12.RR.PX.320. This response reflected
his overall contention that the statutory and regulatory mandates at issue were
allegedly “baked in” to bidders’ scores and thus reflected in the master rollup of
scores but not individually ascertainable in the consensus scoring rubrics. 5.RR.236.
Put plainly, if Mr. Ramirez was unable to identify any probative evidence in the
consensus scoring rubrics during his corporate-representative deposition or at the
temporary injunction hearing, then the Commissioner should not be heard now to
contradict his position—especially where she identifies no specific basis for that
revisionism.
That Mr. Ramirez served as HHSC’s corporate representative further supports
affirming the exclusion of the consensus scoring rubrics. Corporate representatives
must be able to “testify as to matters that are known or reasonably available to the
organization.” TEX. R. CIV. P. 199.2. Mr. Ramirez was thus obligated to provide
“complete, knowledgeable, and binding answers on behalf of” HHSC, In re FINA
Oil & Chem. Co., No. 13-98-640-CV, 1999 WL 33589153, at *4 (Tex. App.—
Corpus Christi–Edinburg Mar. 11, 1999, no pet.) (not designated for publication)
(citation modified))—including testifying as to the Commissioner’s position that the
rubrics reflected statutory preferences and considerations, if this were indeed true.
Yet his preparation did not involve reviewing the rubrics, confirming the
67
Commissioner’s position that the statutory preferences were reflected elsewhere and
that the rubrics were therefore immaterial. The Commissioner is barred from now
contending the rubrics are probative, since “[w]hen [a corporate] representative
claims ignorance of a subject during the deposition, courts [] preclude[] the
corporation from later introducing evidence on that subject”—thus “avoid[ing] trial
by ambush.” Function Media, LLC v. Google, Inc., No. 2:07-CV-279-CE, 2010 WL
276093, at *1 (E.D. Tex. Jan. 15, 2010) (citation modified). Because Mr. Ramirez
expressly disclaimed knowledge of the rubrics, the trial court did not abuse its
discretion in excluding them on fairness grounds as well as evidentiary grounds.
8.RR.156 (“I’m not going to allow the exhibit in. I think it is trial by ambush from
what I can tell.”).
CONCLUSION
For the reasons herein, the Children’s Plans respectfully request that this
Court (1) affirm the trial court’s October 4, 2024, order denying the Commissioner’s
plea to the jurisdiction and granting a temporary injunction and (2) grant the
Children’s Plans any and all other relief to which they are entitled.
68
Respectfully submitted,
NORTON ROSE FULBRIGHT US LLP ALEXANDER DUBOSE & JEFFERSON
By /s/ Warren S. Huang By /s/ Amy Warr
Susan Feigin Harris Amy Warr
State Bar No. 06876980 State Bar No. 00795708
susan.harris@nortonrosefulbright.com awarr@adjtlaw.com
Warren S. Huang Anna M. Baker
State Bar No. 00796788 State Bar No. 00791362
warren.huang@nortonrosefulbright.com abaker@adjtlaw.com
1550 Lamar, Suite 2000 100 Congress Avenue, Suite 1450
Houston, Texas 77010 Austin, Texas 78701
Telephone: (713) 651-5151 Telephone: (512) 482-9300
Paul D. Trahan Karen C. Burgess
State Bar No. 24003075 State Bar No. 00796276
paul.trahan@nortonrosefulbright.com kburgess@burgesslawpc.com
NORTON ROSE FULBRIGHT US LLP Katie Dolan-Galaviz
98 San Jacinto Boulevard, Suite 1100 State Bar No. 24069620
Austin, Texas 78701 kgalaviz@burgesslawpc.com
Telephone: (512) 474-5201 BURGESS LAW PC
404 West 13th Street
Thomas A. Coulter Austin, Texas 78701
tom.coulter@nortonrosefulbright.com Telephone: (512) 482-8808
State Bar No. 04885500
NORTON ROSE FULBRIGHT US LLP Matthew P. Gordon
799 9th Street NW, Suite 1100 Admission Pro Hac Vice
Washington, D.C. 20001 mgordon@perkinscoie.com
Telephone: (202) 662-0200 PERKINS COIE LLP
1301 Second Avenue, Suite 4200
Counsel for Appellee Seattle, Washington 98101
Texas Children’s Health Plan Telephone: (206) 359-8000
Counsel for Appellee
Cook Children’s Health Plan
69
CERTIFICATE OF COMPLIANCE WITH TEXAS RULE OF
APPELLATE PROCEDURE 9.4(I)(3)
Pursuant to Texas Rule of Appellate Procedure 9.4(i)(3), the undersigned
counsel – in reliance upon the word count of the computer program used to prepare
this document – certifies that this brief contains 14,761 words, excluding the words
that need not be counted under Texas Rule of Appellate Procedure 9.4(i)(1).
/s/ Warren S. Huang
Warren S. Huang
70
CERTIFICATE OF SERVICE
Undersigned counsel certifies that a copy of Brief of Appellees Cook
Children’s Health Plan and Texas Children’s Health Plan was served in compliance
with Texas Rule of Appellate Procedure 9.5 via the electronic filing manager or
electronic mail on December 9, 2025, upon all counsel of record:
Ken Paxton
Attorney General of Texas
Brent Webster
First Assistant Attorney General
William R. Peterson
Solicitor General
William F. Cole
Principal Deputy Solicitor General
william.cole@oag.texas.gov
Cory A. Scanlon
Assistant Solicitor General
cory.scanlon@oag.texas.gov
Jeffrey A. Stephens
Assistant Solicitor General
Mohmed I. Patel
Assistant Attorney General
OFFICE OF THE ATTORNEY GENERAL
P.O. Box 12548 (MC 059)
Austin, Texas 78711-25848
Counsel for Appellant Cecile Erwin Young,
In Her Official Capacity as Executive
Commissioner of the Texas Health and
Human Services Commission
71
FOLEY & LARDNER LLP HOLLAND & KNIGHT LLP
Robert F. Johnson III Richard B. Phillips, Jr.
State Bar No. 10786400 State Bar No. 24032833
rjohnson@foley.com rich.phillips@hklaw.com
600 Congress Avenue, Suite 3000 One Arts Plaza
Austin, Texas. 78701 1722 Routh Street, Suite 1500
Telephone: (512) 542-7000 Dallas, Texas 75201
Telephone: (214) 964-9500
Michelle Y. Ku
State Bar No. 24071452 Karen D. Walker
mku@foley.com Admission Pro Hac Vice
Stacy R. Obenhaus karen.walker@hklaw.com
State Bar No. 15161570 Tiffany Roddenberry
sobenhaus@foley.com Admission Pro Hac Vice
FOLEY & LARDNER LLP tiffany.roddenberry@hklaw.com
2021 McKinney, Suite 1600 HOLLAND & KNIGHT LLP
Dallas, Texas 75201 315 South Calhoun Street, Suite 600
Telephone: (214) 999-3000 Tallahassee, Florida 32301
Telephone: (850) 425-5612
Benjamin J. Grossman
Of Counsel Counsel for Appellee Superior
bjgrossman@foley.com Health Plan, Inc.
FOLEY & LARDNER LLP
106 East College Avenue, Suite 900
Tallahassee, Florida 32301
Telephone: (850) 222-6100
Counsel for Appellee Wellpoint
Insurance Company
/s/ Warren S. Huang
Warren S. Huang
72
INDEX TO APPENDIX
TAB 1 Temporary Injunction and Order Denying Defendant’s Plea to the
Jurisdiction
TAB 2 Texas Government Code § 2155.144
TAB 3 Texas Government Code § 533.003
TAB 4 Texas Government Code § 536.052
TAB 5 Texas Government Code § 533.0035
TAB 6 Texas Government Code § 533.002
TAB 7 Texas Government Code § 533.001
TAB 8 Texas Government Code § 533.004
TAB 9 Texas Health & Safety Code § 62.155
TAB 10 1 Texas Administrative Code § 391.101
TAB 11 1 Texas Administrative Code § 391.209
TAB 12 34 Texas Administrative Code § 20.208(d)(3)
TAB 13 Texas Government Code § 552.104
TAB 14 Texas Attorney General Open Records Letter Ruling OR2023-034773
TAB 15 Texas Attorney General Open Records Letter Ruling OR2024-018260
TAB 16 Texas Attorney General Open Records Letter Ruling OR2024-019071
TAB 17 1 Texas Administrative Code § 391.303(d)
TAB 18 Texas Government Code § 524.0002
TAB 19 1 Texas Administrative Code § 391.307
APPENDIX TAB 1
CAUSE NO. D-1-GN-24-003839
COOK CHILDREN'S HEAL TH PLAN; § I THE DISTRICT COURT
TEXAS CHILDREN'S HEALTH PLAN; §
SUPERIOR HEALTHPLAN, INC.; and §
WELLPOI T INSURANCE COMPANY, §
§
Plain ti ffs, §
§
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 INJUNCTIO A D 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 Health Plan Inc. ( 'Superior"), and Wellpoint ln urance Company
( 'Wellpoint, and collectively, '·Plaintiffs"); and the Plea to the Jurisdiction (the "Plea') filed by
Defendant Cecile Erwin Young ('·Defendant"), in her official capacity a Executive Com mi sioner
of the Texas Health and Human ervices Cammi sion ( 'HHSC"). After considering Plaintiffs'
Applications and Defendant's respon e; Defendant's Plea and Plaintiffs' responses; the pleadings
and attached evidence in these consolidated cases os. D- I-GN-24-003839, D-1-G -24-003874
D-1-G -004059, and D-1-G -24-004327); the parties' prehearing briefing; the evidence admitted
in the record and adduced at the hearing held on eptember 30, October I, October 2, and October
pl icable authorities; the arguments of counsel, and all other matters properly before the
Court DENIES Defendant's Plea and GRA TS Plaintiffs' Applications.
Page I of 10
Page 5885
The Court makes the following findings:
I. The Court has subject-matter jurisdiction over the claim in these consolidated
cases because Plaintiffs have alleged and offered e idence demonstrating that Defendant will act
ultra vires in awarding, executing and implementing the contracts ari ing out of Request for
Proposals o. HHS00 11152 (the ''RFP" or "STAR & CHIP RFP") because he has acted ultra
vires in administering the RFP. Plaintiffs properly seek only pro pective 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 doe 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 ccess Reform (" TAR") 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
ief ought on their claims that Defendant has violated and, unless enjoined, will continue
tatutory and regulatory requirements applicable to the RFP.
Page 2 of 10
Page 5886
7. Specifically, Plaintiffs have established that Defendant has violated and , ill
continue to violate the Texa Government Code, Texas Health and Safety Code, and Texa
Administrative Code in procuring managed care contracts for STAR & CHIP in Texas, and that
any award e ecution, 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 ignificant 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)( I);
• Defendant's intended contract award 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 ha 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 MCOs' 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 term 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 I (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-thu destroying any integrity of the procurement process and
creating an unle el playing field that cannot ensure fair consideration of all
proposals and i far from consistent, uniform, and transparent as required by I
Texas Administrative Code§§ 391.10 I 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
Page 3 of 10
Page 5887
continuity of care and provides a medical home for recipient 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 award will fail to consider the need to u e different
managed care plan to meet the need of different populations as required by Texas
Government Code§ 533.003(a)(3);
• Defendant' intended contract awards will unlawfully award mandatory CHIP
contracts to MCO to which Defendant intends to award mandatory ST AR
contracts in violation of Texa Health and Safety Code§§ 62.055 and 62.155;
• 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 exas Government Code
§ 533.004(a)·
• Defendant's continuing practice of denying relevant information about a
procurement to bidders unti I 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 1 Texas
Administrative Code Chapter 391 • and
• Defendant's continuing practice of refusing to consider as untimely any
information submitted in supplemental protests and/or after the protest filing
deadline is incon istent with the procedural protection promised to protestants in
bid protest rule that require consideration of a protest or appeal submitted after the
filing deadline when good cause for delay is shown under I Texas Administrative
Code§ 391.307(d)(l).
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 uch 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 Propo als o. HHS00 13071 (the
ids RFP"). The procurement processe in the STAR & CHIP RFP and the ST AR Kids
b tantively identical. Plaintiffs have demonstrated that Defendant has no intention of
Page 4 of 10
Page 5888
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
award will therefore also violate tatutory and regulatory requirements and be ultra vires.
I 0. Plaintiffs have e tablished a probable right to relief and that Defendant's award,
execution and implementation of the intended, unlawfully procured T R & CHIP contracts will,
if not enjoined cause Plaintiffs to suffer imminent and irreparable injury.
11. Cook Children ha 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 TAR Kids program is in jeopardy because
the larger STAR & CHIP contracts provide economies of scale to limit losses from
TAR Kids·
• Cook Children's I 00 000-plus STAR & CHIP member will be forced to change to
different health plan 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 immediat operational di ruptions, 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% ho focus on STAR Kids;
and
• ew 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.
TCHP has e tablished that execution and implementation of the contracts would
eparable harm to TCHP because:
PageSoflO
Page 5889
• TCHP's 425,000 TAR & CH(P 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
about job security in light of the intended contract awards;
• TCHP s 650 employees are at ri k of lo ing their jobs impacting the financial
health of its entire Texas Children's Health Care System beyond that of the health
plan;
• TCHP has already uffered 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 Kid
members would need to change their health plans, thereby adversely impacting
those member ' access to care adversely impacting TCHP s workforce, adversely
impacting TCHP's ability to operate and damaging TCHP's reputation and
goodwill.
13. uperior has establi hed that execution and implementation of the contracts would
result in irreparable harm to uperior 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 contract ;
• Superior will need to begin reducing its workforce just as new MCO entrants and
MCOs expanding their membership will seek to poach uperior'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 pa1tnerships that promote HHSC's
value-based care priorities. These partnerships involve risk-sharing agreements
Page 6 of 10
Page 5890
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
• Superiors ability to provide the same level of service currently provided under
existing STAR & CH IP contracts through the August 31, 2025 expiration date wi II
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 e tablished 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
plan, thus losing access to their existing Wellpoint pro ider network;
• Wellpoint will be forced to con ider ubstantial reduction in and/or relocations of
its existing I 200-plus-person workforce dedicated to the Texas Medicaid
programs;
• Wellpoint ha 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 ifthere 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 provider is critical to Wellpoint' commitment to providing
high-quality cost-efficient healthcare for the entire duration of its existing
contracts. Wor e yet, Wellpoint has learned that some providers are infonning
members that Wellpoint will no longer be providing TAR & CHIP services in
impacted areas and are encouraging them to switch plan 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 cale 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 (I) 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
Page 7 of 10
Page 5891
nevertheles intends to execute and begin implementing the intended, unlawfully
procured contract awards. In addition, the harm to Wellpoint is imminent as
Defendant doe not intend to correct her unlawful course of action for future
procurements or the ongoing STAR Kid RFP.
15. Plaintiffs have also presented evidence that they will begin losing STAR & CHIP
members no , even though operation under the intended STAR & CH IP contract awards are not
scheduled to start until September I 2025. Providers are already informing Plaintiffs' members
that Plaintiffs will no longer be providing STAR & CHIP services in certain service area 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 becau e the harms Plaintiff: will
suffer cannot be measured by any certain pecuniary tandard. Furthermore, Plaintiffs cannot be
adequately compensated in damage because Defendant is immune from suit for damages and any
limited waiver of immunity is insufficient to com pen ate for Plaintiffs' harms.
17. The harms to Plaintiffs outweigh any potential harms to Defendant or HH C that
would re ult from preserving the tatus quo during the pendency of the e consolidated cases.
either Defendant nor HH C would be harmed if the execution and further implementation of the
intended STAR & CHIP contracts are delayed given that (I) operations under the intended contract
awards are not scheduled to tart until September I, 2025, and (2) HHSC has previously delayed
the RFP several times and was able to continue pro iding 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
fendant executes and implements the intended, unlawfully procured contract awards.
d contract awards will impo e significant harm and confusion on millions of Texas's
Page 8 of 10
Page 5892
STAR & CHIP members. More than 1.5 million Te ans, mostly children-and 43% of the total
STAR & CHIP population-will be forced to change health plan . Thi in turn would cau e
significant harms to those beneficiaries, for which there is no adequate remedy at law a ailable
again t Defendant including:
• Confusion among tho e beneficiaries due to difficulties in informing them of the
change in available health plan ;
• Disruption to those beneficiaries' acce 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 i narrow in cope and tailored to prohibit
Defendant from continuing to act ultra vires. The balance of equitie and public interest weigh in
favor of granting Plaintiffs' reque ted injunctive relief.
ccordingly, it is therefore ORDERED that Defendant's Plea to the Juri diction 1s
DENIED.
It is further ORDERED that Plaintiffs' Applications for Temporary Injunction are
GRA TED. The Court ORDER that:
• Defendant, and all other persons or entitie in active concert or participation with
Defendant, shall refrain from awarding, signing, entering into, executing
implementing, or otherwise taking action to effectuate or perform any contracts
resulting from or in connection with the STAR & CHIP RFP or to further the
procurement or contracting processes for the TAR & CHrP RFP; and
• Defendant, and all other per ons or entities in active concert or participation ith
Defendant, shall refrain from further proceeding with the procurement of, issuing a
notice of intent to award or awarding contracts under, or otherwise implementing
result from the STAR Kids RFP.
Page 9 of 10
Page 5893
IT I F RTHER ORDERED that Defi ndant hall pro ide notice of thi Temporary
Injunction to her officers, ag nts, servants emplo ees, and attorneys, a well as any per ons or
entities in active concert or participation with Defendant.
IT I F RTHER ORDER D that Plaintiff:. bond or cash deposit in lieu of bond i et in
the amount of 1,000.
IT I FURTHER ORDER D that, on the filing by Plaintiff: of the bond and on approving
the bond according to law (or the cash deposit in lieu of bond), the Clerk hall is ue a Temporary
Injunction in conformity ith the la and the term of this order.
IT I FURTHER ORDERED that this Temporary Injunction shall not expire until final
judgment in thi case is entered or this case is otherwise dismissed by thi Court.
I FURTHER ORDERED that the trial on Plaintiff: ultra vires claim eeking
declaratory relief, permanent injunctive relief, and mandamus relief i et for ovember 3 2025.
IG ED on Oc.to\o er 'f ,2024.
~C4(J. OGE PRESIDI G
JudgeLaurieEiserloh
455thDistrictCourt
I, VELVA L PR CE, Distrid C rk.,Travis County,
Texas, do herebyoe-rtifythat this is a true and
corred copy as same ppe-arsof record in my
office. Witness rnyhand and seaJ of office
On 111011202109'28·21
I , '
t;~/ ~~~ ~/)£§=:< ~
i· . ·/.:- VELVA L. PRICE
rn, ·o. DISTRICT CLERK
1693172512
By Deputy:
s nl
1
Page 10 of 10
Page 5894
APPENDIX TAB 2
§ 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).
WESTLAW © 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).
WESTLAW © 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
WESTLAW © 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.
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APPENDIX TAB 3
§ 533.003. Considerations in Awarding Contracts, TX GOVT § 533.003
Vernon's Texas Statutes and Codes Annotated
Government Code (Refs & Annos)
Title 4. Executive Branch (Refs & Annos)
Subtitle I. Health and Human Services
Chapter 533. Medicaid Managed Care Program (Refs & Annos)
Subchapter A. General Provisions (Refs & Annos)
This section has been updated. Click here for the updated version.
V.T.C.A., Government Code § 533.003
§ 533.003. Considerations in Awarding Contracts
(a) In awarding contracts to managed care organizations, the commission shall:
(1) 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;
(2) give extra consideration to organizations that agree to assure continuity of care for at least three months beyond the period
of Medicaid eligibility for recipients;
(3) consider the need to use different managed care plans to meet the needs of different populations;
(4) consider the ability of organizations to process Medicaid claims electronically; and
(5) in the initial implementation of managed care in the South Texas service region, give extra consideration to an organization
that either:
(A) is locally owned, managed, and operated, if one exists; or
(B) is in compliance with the requirements of Section 533.004.
(b) The commission, in considering approval of a subcontract between a managed care organization and a pharmacy benefit
manager for the provision of prescription drug benefits under Medicaid, shall review and consider whether the pharmacy benefit
manager has been in the preceding three years:
(1) convicted of an offense involving a material misrepresentation or an act of fraud or of another violation of state or federal
criminal law;
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§ 533.003. Considerations in Awarding Contracts, TX GOVT § 533.003
(2) adjudicated to have committed a breach of contract; or
(3) assessed a penalty or fine in the amount of $500,000 or more in a state or federal administrative proceeding.
Credits
Added by Acts 1997, 75th Leg., ch. 1262, § 2, eff. June 20, 1997. Amended by Acts 1999, 76th Leg., ch. 1447, § 2, eff. June
19, 1999; Acts 1999, 76th Leg., ch. 1460, § 9.02, eff. Sept. 1, 1999; Acts 2011, 82nd Leg., 1st C.S., ch. 7 (S.B. 7), § 1.02(c),
eff. Sept. 28, 2011; Acts 2015, 84th Leg., ch. 1 (S.B. 219), § 2.221, eff. April 2, 2015.
V. T. C. A., Government Code § 533.003, TX GOVT § 533.003
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.
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APPENDIX TAB 4
§ 536.052. Payment and Contract Award Incentives for..., TX GOVT § 536.052
Vernon's Texas Statutes and Codes Annotated
Government Code (Refs & Annos)
Title 4. Executive Branch (Refs & Annos)
Subtitle I. Health and Human Services
Chapter 536. Medicaid and the Child Health Plan Program: Quality-Based Outcomes and Payments
Subchapter B. Quality-Based Payments Relating to Managed Care Organizations
This section has been updated. Click here for the updated version.
V.T.C.A., Government Code § 536.052
§ 536.052. Payment and Contract Award Incentives for Managed Care Organizations
(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, in order 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) increase the use of alternative payment systems, including shared savings models, in collaboration with physicians and
other health care providers.
(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 reducing potentially preventable events and 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).
(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 533.003 of this code and Section 62.155, Health and Safety Code, give
preference to an organization that offers a managed care plan that successfully implements quality initiatives under Subsection
(a) as determined by the commission based on data or other evidence provided by the organization or meets quality of care and
cost-efficiency benchmarks under Subsection (b).
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§ 536.052. Payment and Contract Award Incentives for..., TX GOVT § 536.052
(e) The commission may implement financial incentives under this section only if implementing the incentives would be cost-
effective.
Credits
Added by Acts 2011, 82nd Leg., 1st C.S., ch. 7 (S.B. 7), § 1.12(a), eff. Sept. 28, 2011. Amended by Acts 2013, 83rd Leg., ch.
1310 (S.B. 7), § 4.13, eff. Sept. 1, 2013; Acts 2015, 84th Leg., ch. 1 (S.B. 219), § 2.265, eff. April 2, 2015; Acts 2015, 84th
Leg., ch. 837 (S.B. 200), § 3.25, eff. Jan. 1, 2016; Acts 2015, 84th Leg., ch. 946 (S.B. 277), § 2.25, eff. Jan. 1, 2016.
V. T. C. A., Government Code § 536.052, TX GOVT § 536.052
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.
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APPENDIX TAB 5
§ 533.0035. Certification by Commission, TX GOVT § 533.0035
Vernon's Texas Statutes and Codes Annotated
Government Code (Refs & Annos)
Title 4. Executive Branch (Refs & Annos)
Subtitle I. Health and Human Services
Chapter 533. Medicaid Managed Care Program (Refs & Annos)
Subchapter A. General Provisions (Refs & Annos)
This section has been updated. Click here for the updated version.
V.T.C.A., Government Code § 533.0035
§ 533.0035. Certification by Commission
(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 terms of the contract, including all requirements of
applicable federal and state law.
(b) Notwithstanding any other law, the commission may not award a contract under this chapter to a managed care organization
that does not receive the certification required under this section.
(c) A managed care organization may appeal a denial of certification by the commission under this section.
Credits
Added by Acts 2021, 87th Leg., ch. 609 (S.B. 1244), § 1, eff. Sept. 1, 2021.
V. T. C. A., Government Code § 533.0035, TX GOVT § 533.0035
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.
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APPENDIX TAB 6
§ 533.002. Purpose, TX GOVT § 533.002
Vernon's Texas Statutes and Codes Annotated
Government Code (Refs & Annos)
Title 4. Executive Branch (Refs & Annos)
Subtitle I. Health and Human Services
Chapter 533. Medicaid Managed Care Program (Refs & Annos)
Subchapter A. General Provisions (Refs & Annos)
This section has been updated. Click here for the updated version.
V.T.C.A., Government Code § 533.002
§ 533.002. Purpose
The commission shall implement the Medicaid managed care program by contracting with managed care organizations in a
manner that, to the extent possible:
(1) improves the health of Texans by:
(A) emphasizing prevention;
(B) promoting continuity of care; and
(C) providing a medical home for recipients;
(2) ensures that each recipient receives high quality, comprehensive health care services in the recipient's local community;
(3) encourages the training of and access to primary care physicians and providers;
(4) maximizes cooperation with existing public health entities, including local departments of health;
(5) provides incentives to managed care organizations to improve the quality of health care services for recipients by providing
value-added services; and
(6) reduces administrative and other nonfinancial barriers for recipients in obtaining health care services.
Credits
Added by Acts 1997, 75th Leg., ch. 1262, § 2, eff. June 20, 1997. Amended by Acts 2015, 84th Leg., ch. 1 (S.B. 219), § 2.210,
eff. April 2, 2015.
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§ 533.002. Purpose, TX GOVT § 533.002
Editors' Notes
REPEAL
<This section is repealed by Acts 2023, 88th Leg., ch. 769 (H.B 4611), § 3.01(3), effective April 1, 2025. >
V. T. C. A., Government Code § 533.002, TX GOVT § 533.002
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.
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APPENDIX TAB 7
§ 533.001. Definitions, TX GOVT § 533.001
Vernon's Texas Statutes and Codes Annotated
Government Code (Refs & Annos)
Title 4. Executive Branch (Refs & Annos)
Subtitle I. Health and Human Services
Chapter 533. Medicaid Managed Care Program (Refs & Annos)
Subchapter A. General Provisions (Refs & Annos)
This section has been updated. Click here for the updated version.
V.T.C.A., Government Code § 533.001
§ 533.001. Definitions
In this chapter:
(1) “Commission” means the Health and Human Services Commission or an agency operating part of the state Medicaid
managed care program, as appropriate.
(2) “Executive commissioner” means the executive commissioner of the Health and Human Services Commission.
(3) “Health and human services agencies” has the meaning assigned by Section 531.001.
(4) “Managed care organization” means a person who is authorized or otherwise permitted by law to arrange for or provide
a managed care plan.
(5) “Managed care plan” means a plan under which a person undertakes to provide, arrange for, pay for, or reimburse any
part of the cost of any health care services. A part of the plan must consist of arranging for or providing health care services
as distinguished from indemnification against the cost of those services on a prepaid basis through insurance or otherwise.
The term includes a primary care case management provider network. The term does not include a plan that indemnifies a
person for the cost of health care services through insurance.
(6) “Recipient” means a recipient of Medicaid.
(7) “Health care service region” or “region” means a Medicaid managed care service area as delineated by the commission.
Credits
Added by Acts 1997, 75th Leg., ch. 1262, § 2, eff. June 20, 1997. Amended by Acts 2015, 84th Leg., ch. 1 (S.B. 219), § 2.209,
eff. April 2, 2015.
V. T. C. A., Government Code § 533.001, TX GOVT § 533.001
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§ 533.001. Definitions, TX GOVT § 533.001
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.
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APPENDIX TAB 8
§ 533.004. Mandatory Contracts, TX GOVT § 533.004
Vernon's Texas Statutes and Codes Annotated
Government Code (Refs & Annos)
Title 4. Executive Branch (Refs & Annos)
Subtitle I. Health and Human Services
Chapter 533. Medicaid Managed Care Program (Refs & Annos)
Subchapter A. General Provisions (Refs & Annos)
This section has been updated. Click here for the updated version.
V.T.C.A., Government Code § 533.004
§ 533.004. Mandatory Contracts
(a) Subject to the considerations required under Section 533.003 and the certification required under Section 533.0035, 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 is licensed 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 owned by the hospital district or municipality; 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, Acts of the 74th Legislature, Regular
Session, 1995.
(b) A managed care organization described by Subsection (a) is subject to all terms and conditions 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, Acts of the 74th Legislature, Regular Session,
WESTLAW © 2025 Thomson Reuters. No claim to original U.S. Government Works. 1
§ 533.004. Mandatory Contracts, TX GOVT § 533.004
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 defined by the commission 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 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 1997, 75th Leg., ch. 1262, § 2, eff. June 20, 1997. Amended by Acts 1999, 76th Leg., ch. 1447, § 3, eff. June
19, 1999; Acts 1999, 76th Leg., ch. 1460, § 9.03, eff. Sept. 1, 1999; Acts 2001, 77th Leg., ch. 1420, § 14.766, eff. Sept. 1, 2001;
Acts 2003, 78th Leg., ch. 1276, § 10A.515, eff. Sept. 1, 2003; Acts 2021, 87th Leg., ch. 609 (S.B. 1244), § 2, eff. Sept. 1, 2021.
V. T. C. A., Government Code § 533.004, TX GOVT § 533.004
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.
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APPENDIX TAB 9
§ 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.
WESTLAW © 2025 Thomson Reuters. No claim to original U.S. Government Works. 1
§ 62.155. Health Plan Providers, TX HEALTH & S § 62.155
V. T. C. A., Health & Safety Code § 62.155, 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.
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APPENDIX TAB 10
§ 391.101. Purpose, 1 TX ADC § 391.101
Texas Administrative Code
Title 1. Administration
Part 15. Texas Health and Human Services Commission
Chapter 391. Purchase of Goods and Services by the Texas Health and Human Services Commission
Subchapter A. General Provisions
1 TAC § 391.101
§ 391.101. Purpose
Currentness
The purpose of these rules is to:
(1) provide transparency to the public, the legislature, state agencies, and vendors on the procedures followed by HHSC
procurement personnel;
(2) provide for consistent and uniform management of procurement and contracting processes; and
(3) obtain best value when purchasing goods and services to better serve Texas residents and businesses.
Credits
Source: The provisions of this §391.101 adopted to be effective May 12, 2021, 46 TexReg 3017; amended to be effective May
10, 2022, 47 TexReg 2732.
Current through 50 Tex.Reg. No. 7460, dated November 14, 2025, as effective on or before November 21, 2025. Some sections
may be more current. See credits for details.
1 TAC § 391.101, 1 TX ADC § 391.101
End of Document © 2025 Thomson Reuters. No claim to original U.S. Government Works.
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APPENDIX TAB 11
§ 391.209. Request for Proposals, 1 TX ADC § 391.209
Texas Administrative Code
Title 1. Administration
Part 15. Texas Health and Human Services Commission
Chapter 391. Purchase of Goods and Services by the Texas Health and Human Services Commission
Subchapter B. Procurement and Special Contracting Methods
Division 1. Procurement Methods
1 TAC § 391.209
§ 391.209. Request for Proposals
Currentness
Goods or services may be purchased through a Request for Proposals (RFP) as authorized by this section.
(1) Advertisement. Public notice of the issuance of an RFP is posted on the Electronic State Business Daily in accordance
with Texas Government Code §2155.083. The solicitation must include evaluation and selection criteria and the process for
making a selection.
(2) Minor irregularities in a response. HHSC may waive a minor irregularity or permit a respondent to correct a minor
irregularity in a response, if the irregularity:
(A) is purely a matter of form rather than substance; and
(B) does not materially affect price, quality, or delivery of the desired goods or services.
(3) Evaluation and selection. HHSC utilizes an evaluation method which provides for:
(A) the fair consideration of proposals; and
(B) if applicable, a process for determining the competitive range.
(4) Negotiations.
(A) HHS or DFPS may discuss acceptable or potentially acceptable proposals with respondents to assess a respondent's ability
to meet the solicitation requirements.
(B) After receiving a proposal but before making an award, HHS or DFPS may permit the respondent to revise its proposal to
obtain the best and final offer at any stage in the evaluation or negotiation process.
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§ 391.209. Request for Proposals, 1 TX ADC § 391.209
(5) Award. A contract is awarded to the respondent whose proposal offers the best value for the state in accordance with
Texas Government Code §2155.144.
Credits
Source: The provisions of this §391.209 adopted to be effective May 12, 2021, 46 TexReg 3017; amended to be effective May
10, 2022, 47 TexReg 2732.
Current through 50 Tex.Reg. No. 7460, dated November 14, 2025, as effective on or before November 21, 2025. Some sections
may be more current. See credits for details.
1 TAC § 391.209, 1 TX ADC § 391.209
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APPENDIX TAB 12
§ 20.208. Competitive Sealed Proposals, 34 TX ADC § 20.208
Texas Administrative Code
Title 34. Public Finance
Part 1. Comptroller of Public Accounts
Chapter 20. Statewide Procurement and Support Services
Subchapter C. Procurement Methods and Contract Formation
Division 2. Procurement Methods
34 TAC § 20.208
§ 20.208. Competitive Sealed Proposals
Currentness
(a) Availability of method. A state agency may follow the competitive sealed proposals procurement method to acquire
goods or services if it determines that competitive sealed bidding and informal competitive bidding are not practical or are
disadvantageous to the state.
(b) Solicitation of proposals. A state agency shall:
(1) solicit proposals under this subchapter by making available a request for proposals that contains all the information
needed to submit a responsive proposal, the factors other than price that will be used to determine best value for the state,
and the criteria that will be used to evaluate factors other than price; and
(2) give public notice of the request for proposals on the ESBD and distribute notice to the CMBL in the manner provided
in this subchapter.
(c) Opening of proposals; respondent list. A state agency may not open proposals until the published deadline for submitting a
proposal has passed, and shall maintain a list of respondents that submitted a proposal in response to each request for proposal.
(d) Negotiation of proposals.
(1) A state agency may discuss acceptable or potentially acceptable proposals with a respondent to assess its ability to
meet the specifications of the solicitation. A potentially acceptable offer is any offer which the state agency determines
to be reasonably considered for award selection. When the division is carrying out a request for proposals, it may invite
a state agency to participate in discussions with respondents.
(2) After receiving a proposal but before making an award, a state agency may permit the respondent to revise its proposal
one or more times to obtain the best and final offer.
(3) A state agency may not disclose information derived from proposals or discussions with a respondent to any competing
respondent prior to award or cancellation of the solicitation.
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§ 20.208. Competitive Sealed Proposals, 34 TX ADC § 20.208
(4) A state agency shall provide each respondent that submitted an acceptable or potentially acceptable proposal an equal
opportunity to discuss and revise proposals.
(e) Contract award.
(1) A state agency may award a contract to the respondent whose proposal offers the best value for the state.
(2) A state agency shall refuse all offers if none is acceptable, and may refuse any offer that is not in the best interest
of the state.
(3) A state agency shall determine which proposal offers the best value for the state in accordance with Government Code,
§§2155.074, 2155.075 and 2156.125, as applicable.
(4) A state agency shall document and retain the reasons for making an award in the contract file.
Credits
Source: The provisions of this §20.208 adopted to be effective January 24, 2017, 42 TexReg 233; amended to be effective May
1, 2022, 47 TexReg 2558.
Current through 50 Tex.Reg. No. 7460, dated November 14, 2025, as effective on or before November 21, 2025. Some sections
may be more current. See credits for details.
34 TAC § 20.208, 34 TX ADC § 20.208
End of Document © 2025 Thomson Reuters. No claim to original U.S. Government Works.
WESTLAW © 2025 Thomson Reuters. No claim to original U.S. Government Works. 2
APPENDIX TAB 13
§ 552.104. Exception: Information Related to Competition or Bidding, TX GOVT § 552.104
Vernon's Texas Statutes and Codes Annotated
Government Code (Refs & Annos)
Title 5. Open Government; Ethics (Refs & Annos)
Subtitle A. Open Government
Chapter 552. Public Information (Refs & Annos)
Subchapter C. Information Excepted from Required Disclosure
V.T.C.A., Government Code § 552.104
§ 552.104. Exception: Information Related to Competition or Bidding
Currentness
(a) Information is excepted from the requirements of Section 552.021 if a governmental body demonstrates that release of the
information would harm its interests by providing an advantage to a competitor or bidder in a particular ongoing competitive
situation or in a particular competitive situation where the governmental body establishes the situation at issue is set to reoccur
or there is a specific and demonstrable intent to enter into the competitive situation again in the future.
(b) Except as provided by Subsection (c), the requirement of Section 552.022 that a category of information listed under Section
552.022(a) is public information and not excepted from required disclosure under this chapter unless expressly confidential
under law does not apply to information that is excepted from required disclosure under this section.
(c) Subsection (b) does not apply to information described by Section 552.022(a) relating to the receipt or expenditure of public
or other funds by a governmental body for a parade, concert, or other entertainment event paid for in whole or part with public
funds. A person, including a governmental body, may not include a provision in a contract related to an event described by
this subsection that prohibits or would otherwise prevent the disclosure of information described by this subsection. A contract
provision that violates this subsection is void.
Credits
Added by Acts 1993, 73rd Leg., ch. 268, § 1, eff. Sept. 1, 1993. Amended by Acts 2001, 77th Leg., ch. 1272, § 7.01, eff.
June 15, 2001; Acts 2019, 86th Leg., ch. 45 (H.B. 81), § 1, eff. May 17, 2019; Acts 2019, 86th Leg., ch. 1216 (S.B. 943), §
3, eff. Jan. 1, 2020.
V. T. C. A., Government Code § 552.104, TX GOVT § 552.104
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.
WESTLAW © 2025 Thomson Reuters. No claim to original U.S. Government Works. 1
APPENDIX TAB 14
THE OFFICE OF THE ATTORNEY GENERAL OF TEXAS
October 11, 2023
Ms. Sandy Cardiff
Legal Assistant
Health and Human Services Commission
4601 West Guadalupe Street Mail Code 1070
Austin, TX 78751
OR2023-034773
Re: Request for AXXXXXXXX.0450015
Dear Ms. Cardiff,
The Office of the Attorney General has received your request for a ruling and assigned
your request ID# 23-087074.
After reviewing your arguments and the submitted information, we have determined
your request does not present a novel or complex issue. Thus, we are addressing your
claims in a memorandum opinion. You claim the submitted information may be
withheld from the requestor pursuant to section 552.104 of the Government
Code. Upon review of your arguments and the submitted information, we conclude
you may withhold the submitted information under section 552.104.
For more information on the cited exception, please refer to the open government
information on our website at https://www.texasattorneygeneral.gov/open-government/
governmental-bodies/open-records-memorandum-rulings. You may also contact our
Open Government Hotline at 1-877-OPENTEX.
Enc. Submitted Documents
c: Requestor
(w/o encosures)
Post Office Box 12548, Austin, Texas 78711-2548 • (512) 463-2100 • www.texasattorneygeneral.gov
APPENDIX TAB 15
KEN PAXTON
ATTORNEY GENERAL OF TEXAS
May 23, 2024
Mr. Jonathan Miles
Director, Open Records Department
Texas Health and Human Services Commission
P.O. Box 13247
Austin, Texas 78711-3247
OR2024-018260
Dear Mr. Miles:
You ask whether certain information is subject to required public disclosure under the
Public Information Act (the “Act”), chapter 552 of the Government Code. Your request
was assigned ID# 24-014077 (HHSC ORR Nos. A0308024.0450022,
AXXXXXXXX.0450007, AXXXXXXXX.0450018, AXXXXXXXX.0450003, AXXXXXXXX.0450004,
AXXXXXXXX.0450020, AXXXXXXXX.0450024, AXXXXXXXX.0450030, AXXXXXXXX.0450016,
AXXXXXXXX.0450009, and AXXXXXXXX.0450013).
The Texas Health and Human Services Commission (the “commission”) received eleven
requests from ten different requestors for information pertaining to a specified request for
proposals. You state you will release some information. You claim the submitted
information is excepted from disclosure under sections 552.103 and 552.104 of the
Government Code. We have received comments from the first requestor. See Gov’t Code
§ 552.304 (interested party may submit comments stating why information should or should
not be released). We have considered the submitted arguments and reviewed the submitted
information.
Initially, you inform us the commission wishes to withdraw its request for an open records
decision with respect to the request for information with commission reference number
AXXXXXXXX.0450020 because the commission will release the records at issue to the
requestor. This ruling does not address the public availability of the information the
commission no longer seeks to withhold.
Next, you state some of the requested information was the subject of previous requests for
information, in response to which this office issued Open Records Letter Nos. 2023-20925
(2023) and 2023-34773 (2023). We have no indication the law, facts, and circumstances
Post Office Box 12548, Austin, Texas 78711-2548 • (512) 463-2100 • www.texasattorneygeneral.gov
Mr. Jonathan Miles - Page 2
on which the prior rulings were based have changed. Thus, the commission may continue
to rely on Open Records Letter Nos. 2023-20925 and 2023-34773 as previous
determinations and withhold the information at issue in accordance with those rulings. See
Open Records Decision No. 673 (2001) (so long as law, facts, and circumstances on which
prior ruling was based have not changed, first type of previous determination exists where
requested information is precisely same information as was addressed in prior attorney
general ruling, ruling is addressed to same governmental body, and ruling concludes that
information is or is not excepted from disclosure).
Further, the first requestor asserts the commission failed to comply with section 552.301 of
the Government Code. Section 552.301 of the Government Code prescribes the procedures
a governmental body must follow in asking this office to decide whether requested
information is excepted from public disclosure. See Gov’t Code § 552.301. Pursuant to
section 552.301(b), a governmental body must ask for a decision from this office and state
the exceptions that apply within ten business days of receiving the written request. See id.
§ 552.301(b). Pursuant to section 552.301(e), a governmental body is required to submit
to this office within fifteen business days of receiving an open records request (1) written
comments stating the reasons why the claimed exceptions apply that would allow the
information to be withheld, (2) a copy of the written request for information, (3) a signed
statement or sufficient evidence showing the date the governmental body received the
written request, and (4) a copy of the specific information requested or representative
samples, labeled to indicate which exceptions apply to which parts of the documents. See
id. § 552.301(e). In this instance, you state, and provide documentation showing, the
commission received the first request for information on March 8, 2024. This office only
counts business days as provided by section 552.0031 of the Government Code. Id.
§§ 552.0031 (defining “business day” for purposes of the Act). Consequently, the
commission’s ten and fifteen-business-day deadlines were March 22, 2024, and March 29,
2024, respectively. The commission provided the information required by sections
552.301(b) and 552.301(e) via hand delivery on March 19, 2024, and March 28, 2024,
respectively. See id. § 552.308 (describing rules for calculating submission dates of
documents sent via first class United States mail). Accordingly, we find the commission
complied with section 552.301 of the Government Code in requesting a decision from this
office. Therefore, we will address your submitted arguments against disclosure of the
information at issue.
Section 552.104(a) of the Government Code excepts from disclosure information that a
governmental body demonstrates, if released, would “harm its interests by providing an
advantage to a competitor or bidder in a particular ongoing competitive situation or in a
particular competitive situation where the governmental body establishes the situation at
issue is set to reoccur or there is a specific and demonstrable intent to enter into the
competitive situation again in the future.” Id. § 552.104(a). The “test under section
552.104 is whether knowing another bidder’s [or competitor’s information] would be an
advantage, not whether it would be a decisive advantage.” Boeing Co. v. Paxton, 466
S.W.3d 831, 841 (Tex. 2015). After review of the information at issue and consideration
of the arguments, we find the commission has established the applicability of section
Mr. Jonathan Miles - Page 3
552.104(a) to the information at issue. Accordingly, we conclude the commission may
withhold the submitted information under section 552.104(a) of the Government Code. 1
This letter ruling is limited to the particular information at issue in this request and limited
to the facts as presented to us; therefore, this ruling must not be relied upon as a previous
determination regarding any other information or any other circumstances.
This ruling triggers important deadlines regarding the rights and responsibilities of the
governmental body and of the requestor. For more information concerning those rights and
responsibilities, please visit our website at https://www.texasattorneygeneral.gov/open-
government/members-public/what-expect-after-ruling-issued or call the OAG’s Open
Government Hotline, toll free, at (877) 673-6839. Questions concerning the allowable
charges for providing public information under the Public Information Act may be directed
to the Cost Rules Administrator of the OAG, toll free, at (888) 672-6787.
Sincerely,
D. Michelle Case
Assistant Attorney General
Open Records Division
DMH/tb
Ref: ID# 24-014077
c: 10 Requestors
1
As our ruling is dispositive, we need not address your remaining argument against disclosure of this
information.
APPENDIX TAB 16
KEN PAXTON
ATTORNEY GENERAL OF TEXAS
May 30, 2024
Mr. Jonathan Miles
Open Records
Texas Health and Human Services Commission
P.O. Box 13247
Austin, Texas 78711
OR2024-019071
Dear Mr. Miles:
You ask whether certain information is subject to required public disclosure under the
Public Information Act (the “Act”), chapter 552 of the Government Code. Your request
was assigned ID# 24-014901 (ORR AXXXXXXXX.0450006).
The Texas Health and Human Services Commission (the “commission”) received a request
for information pertaining to a specified request for proposal. You state you will release
some information. You also state you will rely on Open Records Letter Nos. 2023-34773
(2023) and 2023-20925 (2003) with respect to some of the requested information. 1 You
claim the submitted information is excepted from disclosure under sections 552.103,
552.104, 552.107, and 552.111 of the Government Code. We have considered the
exceptions you claim and reviewed the submitted representative sample of information. 2
We have also received and considered comments from the requestor. See Gov’t Code
§ 552.304 (interested party may submit comments stating why information should or should
not be released).
Section 552.104(a) of the Government Code excepts from disclosure information that a
governmental body demonstrates, if released, would “harm its interests by providing an
advantage to a competitor or bidder in a particular ongoing competitive situation or in a
1
See Open Records Decision No. 673 (2001) (so long as law, facts, and circumstances on which prior ruling
was based have not changed, first type of previous determination exists where requested information is
precisely same information as was addressed in a prior attorney general ruling, ruling is addressed to same
governmental body, and ruling concludes that information is or is not excepted from disclosure).
2
We assume the “representative sample” of records submitted to this office is truly representative of the
requested records as a whole. See Open Records Decision Nos. 499 (1988), 497 (1988). This open records
letter does not reach, and therefore does not authorize the withholding of, any other requested records to the
extent those records contain substantially different types of information than that submitted to this office.
Post Office Box 12548, Austin, Texas 78711-2548 • (512) 463-2100 • www.texasattorneygeneral.gov
Mr. Jonathan Miles - Page 2
particular competitive situation where the governmental body establishes the situation at
issue is set to reoccur or there is a specific and demonstrable intent to enter into the
competitive situation again in the future.” Id. § 552.104(a). The “test under section
552.104 is whether knowing another bidder’s [or competitor’s information] would be an
advantage, not whether it would be a decisive advantage.” Boeing Co. v. Paxton, 466
S.W.3d 831, 841 (Tex. 2015). After review of the information at issue and consideration
of the arguments, we find the commission has established the applicability of section
552.104(a) to the information at issue. Accordingly, we conclude the commission may
withhold the submitted information under section 552.104(a) of the Government Code. 3
This letter ruling is limited to the particular information at issue in this request and limited
to the facts as presented to us; therefore, this ruling must not be relied upon as a previous
determination regarding any other information or any other circumstances.
This ruling triggers important deadlines regarding the rights and responsibilities of the
governmental body and of the requestor. For more information concerning those rights and
responsibilities, please visit our website at https://www.texasattorneygeneral.gov/open-
government/members-public/what-expect-after-ruling-issued or call the OAG’s Open
Government Hotline, toll free, at (877) 673-6839. Questions concerning the allowable
charges for providing public information under the Public Information Act may be directed
to the Cost Rules Administrator of the OAG, toll free, at (888) 672-6787.
Sincerely,
Vi Thanh Hoang
Assistant Attorney General
Open Records Division
VTH/jxd
Ref: ID# 24-014901
c: Requestor
3
As our ruling is dispositive, we need not address your remaining argument against disclosure of this
information.
APPENDIX TAB 17
§ 391.303. Applicability, 1 TX ADC § 391.303
Texas Administrative Code
Title 1. Administration
Part 15. Texas Health and Human Services Commission
Chapter 391. Purchase of Goods and Services by the Texas Health and Human Services Commission
Subchapter C. Protests
1 TAC § 391.303
Formerly cited as 1 TX ADC § 391.403
§ 391.303. Applicability
Currentness
(a) For purposes of this subchapter, HHS is defined as the Texas Health and Human Services Commission, the Texas Department
of State Health Services, the Texas Department of Family and Protective Services, and the Texas Civil Commitment Office.
(b) A respondent may protest a solicitation, response evaluation, or contract award if the respondent is able to specifically
identify a statutory or regulatory provision that HHS allegedly violated.
(c) This subchapter does not apply to:
(1) the award of grants or subcontracts;
(2) interagency or interlocal agreements executed in accordance with applicable law;
(3) open enrollment contracts;
(4) rejected applications, purchases, or contract awards in relation to HHSC's group purchasing organizations program; or
(5) direct contract awards as specified in §391.247 of this chapter (relating to Direct Contract Award).
(d) HHSC will not consider protests filed pursuant to this subchapter as contested cases under the Administrative Procedure
Act, Texas Government Code, Chapter 2001.
Credits
Source: The provisions of this §391.303 adopted to be effective May 12, 2021, 46 TexReg 3017; amended to be effective May
10, 2022, 47 TexReg 2732.
Current through 50 Tex.Reg. No. 7460, dated November 14, 2025, as effective on or before November 21, 2025. Some sections
may be more current. See credits for details.
WESTLAW © 2025 Thomson Reuters. No claim to original U.S. Government Works. 1
§ 391.303. Applicability, 1 TX ADC § 391.303
1 TAC § 391.303, 1 TX ADC § 391.303
End of Document © 2025 Thomson Reuters. No claim to original U.S. Government Works.
WESTLAW © 2025 Thomson Reuters. No claim to original U.S. Government Works. 2
APPENDIX TAB 18
§ 524.0002. General Responsibility of Executive Commissioner..., TX GOVT § 524.0002
Vernon's Texas Statutes and Codes Annotated
Government Code (Refs & Annos)
Title 4. Executive Branch (Refs & Annos)
Subtitle I. Health and Human Services
Chapter 524. Authority over Health and Human Services System
Subchapter A. System Oversight Authority of Commission
V.T.C.A., Government Code § 524.0002
Formerly cited as TX GOVT § 531.0055
§ 524.0002. General Responsibility of Executive
Commissioner for Health and Human Services System
Currentness
(a) The executive commissioner, as necessary to perform the functions described by Section 524.0001 and Subchapter E in
implementing applicable policies the executive commissioner establishes for a health and human services agency or division,
shall:
(1) manage and direct the operations of each agency or division, as applicable;
(2) supervise and direct the activities of each agency commissioner or division director, as applicable; and
(3) be responsible for the administrative supervision of the internal audit program for the agencies, including:
(A) selecting the director of internal audit;
(B) ensuring the director of internal audit reports directly to the executive commissioner; and
(C) ensuring the independence of the internal audit function.
(b) The executive commissioner's operational authority and responsibility for purposes of Subsection (a) and Section
524.0151(a)(2) for each health and human services agency or division, as applicable, includes authority over and responsibility
for:
(1) daily operations management of the agency or division, including the organization, management, and operating procedures
of the agency or division;
(2) resource allocation within the agency or division, including the use of federal funds the agency or division receives;
WESTLAW © 2025 Thomson Reuters. No claim to original U.S. Government Works. 1
§ 524.0002. General Responsibility of Executive Commissioner..., TX GOVT § 524.0002
(3) personnel and employment policies;
(4) contracting, purchasing, and related policies, subject to this chapter and other laws relating to contracting and purchasing
by a state agency;
(5) information resources systems the agency or division uses;
(6) facility location; and
(7) the coordination of agency or division activities with activities of other components of the health and human services
system and state agencies.
Credits
Added by Acts 2023, 88th Leg., ch. 769 (H.B. 4611), § 1.01, eff. April 1, 2025.
<Chapter 524 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 § 524.0002, TX GOVT § 524.0002
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.
WESTLAW © 2025 Thomson Reuters. No claim to original U.S. Government Works. 2
APPENDIX TAB 19
§ 391.307. Review and Disposition of Protests, 1 TX ADC § 391.307
Texas Administrative Code
Title 1. Administration
Part 15. Texas Health and Human Services Commission
Chapter 391. Purchase of Goods and Services by the Texas Health and Human Services Commission
Subchapter C. Protests
1 TAC § 391.307
Formerly cited as 1 TX ADC § 391.407
§ 391.307. Review and Disposition of Protests
Currentness
(a) Upon receipt of a protest, the Deputy Executive Commissioner of Procurement and Contracting Services may:
(1) dismiss the protest if:
(A) it is not timely; or
(B) it does not meet the requirements of §391.305 of this subchapter (relating to Filing of a Protest);
(2) solicit written responses to the protest from other interested parties; or
(3) attempt to resolve the protest by mutual agreement.
(b) The Deputy Executive Commissioner of Procurement and Contracting Services may confer with the HHSC Chief Counsel
at any time during the review of the protest.
(c) If the protest is not dismissed or resolved by mutual agreement, the Deputy Executive Commissioner of Procurement and
Contracting Services will issue a written determination on the protest.
(1) If the Deputy Executive Commissioner of Procurement and Contracting Services determines that no violation of the specific
statutory or regulatory provision cited by the protestant has occurred, they shall so inform the protestant and other interested
parties by letter that sets forth the reasons for the determination.
(2) If the Deputy Executive Commissioner of Procurement and Contracting Services determines that HHS violated the specific
statutory or regulatory provision cited by the protestant in a case where HHS has not awarded a contract, they shall so inform
the protestant and other interested parties by letter that sets forth the reasons for the determination and any appropriate remedial
action.
WESTLAW © 2025 Thomson Reuters. No claim to original U.S. Government Works. 1
§ 391.307. Review and Disposition of Protests, 1 TX ADC § 391.307
(3) If the Deputy Executive Commissioner of Procurement and Contracting Services determines that HHS violated the specific
statutory or regulatory provision cited by the protestant in a case where HHS awarded a contract, they shall so inform the
protestant and other interested parties by letter that sets forth the reasons for the determination, which may include ordering
the contract void.
(4) The Deputy Executive Commissioner of Procurement and Contracting Services' written determination is the final
administrative action by HHSC on a protest filed under this subchapter unless the protestant files an appeal of the determination
under subsection (d) of this section.
(d) The protestant may appeal the Deputy Executive Commissioner of Procurement and Contracting Services' determination
on a protest to the HHSC Executive Commissioner. The appeal must be in writing and submitted by electronic mail
to HHSCExecutiveCommissioner@hhs.texas.gov no later than 10 business days after the date of the Deputy Executive
Commissioner of Procurement and Contracting Services' determination. The appeal shall be limited to review of the Deputy
Executive Commissioner of Procurement and Contracting Services' determination. The protestant must mail or deliver copies
of the appeal to other interested parties, and each copy must contain a certified statement that such copies have been provided.
(1) A protest or appeal that is not timely filed shall not be considered unless good cause for delay is shown or the HHSC Executive
Commissioner determines that an appeal raises issues that are significant to HHSC's procurement practices or procedures in
general.
(2) The HHSC Executive Commissioner may confer with the HHSC Chief Counsel at any time during the review of the appeal.
(3) The HHSC Executive Commissioner will review the appeal of the Deputy Executive Commissioner of Procurement and
Contracting Services' determination and render a final decision on the protest issues.
(4) A decision issued in writing by the HHSC Executive Commissioner shall be the final administrative action of HHSC on a
protest determination that is appealed under this subchapter.
Credits
Source: The provisions of this §391.307 adopted to be effective May 12, 2021, 46 TexReg 3017.
Current through 50 Tex.Reg. No. 7460, dated November 14, 2025, as effective on or before November 21, 2025. Some sections
may be more current. See credits for details.
1 TAC § 391.307, 1 TX ADC § 391.307
End of Document © 2025 Thomson Reuters. No claim to original U.S. Government Works.
WESTLAW © 2025 Thomson Reuters. No claim to original U.S. Government Works. 2
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Warren Huang on behalf of Warren Huang
Bar No. 796788
warren.huang@nortonrosefulbright.com
Envelope ID: 108906116
Filing Code Description: Brief Requesting Oral Argument
Filing Description: Brief Requesting Oral Argument
Status as of 12/9/2025 4:50 PM CST
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warren.huang@nortonrosefulbright.com
Envelope ID: 108906116
Filing Code Description: Brief Requesting Oral Argument
Filing Description: Brief Requesting Oral Argument
Status as of 12/9/2025 4:50 PM CST
Associated Case Party: Cook Children's Health Plan
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Jennifer Cook Jennifer.Cook@oag.texas.gov 12/9/2025 4:20:34 PM SENT
Associated Case Party: Aetna Better Health of Texas, Inc.
Name BarNumber Email TimestampSubmitted Status
Joseph Knight 11601275 jknight@ebbklaw.com 12/9/2025 4:20:34 PM SENT
Associated Case Party: Cecile Erwin Young, Texas Health and Human Services
Name BarNumber Email TimestampSubmitted Status
Cory Scanlon 24104599 cory.scanlon@oag.texas.gov 12/9/2025 4:20:34 PM SENT
William FCole William.Cole@oag.texas.gov 12/9/2025 4:20:34 PM SENT
Jeffrey Stephens jeff.stephens@oag.texas.gov 12/9/2025 4:20:34 PM SENT
Mohmed Patel mohmed.patel@oag.texas.gov 12/9/2025 4:20:34 PM SENT
Associated Case Party: Molina Healthcare of Texas, Inc.
Automated Certificate of eService
This automated certificate of service was created by the efiling system.
The filer served this document via email generated by the efiling system
on the date and to the persons listed below. The rules governing
certificates of service have not changed. Filers must still provide a
certificate of service that complies with all applicable rules.
Warren Huang on behalf of Warren Huang
Bar No. 796788
warren.huang@nortonrosefulbright.com
Envelope ID: 108906116
Filing Code Description: Brief Requesting Oral Argument
Filing Description: Brief Requesting Oral Argument
Status as of 12/9/2025 4:50 PM CST
Associated Case Party: Molina Healthcare of Texas, Inc.
Name BarNumber Email TimestampSubmitted Status
Jason R.LaFond jlafond@scottdoug.com 12/9/2025 4:20:34 PM SENT
Cheryl LaFond 24104015 clafond@scottdoug.com 12/9/2025 4:20:34 PM SENT
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