15-24-00114-CV
Tex. App.Jul 10, 2025Background
- The Texas Health and Human Services Commission (HHSC), led by Executive Commissioner Cecile Young, conducted a procurement (RFP) for managed care services under STAR Medicaid and CHIP programs, impacting over 1.5 million vulnerable Texans.
- Superior HealthPlan, along with other existing Medicaid managed care organizations (MCOs), challenged the procurement, alleging HHSC’s process violated numerous statutory and regulatory requirements regarding mandatory preferences, quality metrics, and contract awards.
- HHSC improperly disclosed competitor bid proposals to at least one rival's legal counsel during the ongoing procurement, undermining the integrity of the process.
- The trial court consolidated several ultra vires suits against the Executive Commissioner and, after an evidentiary hearing, denied her plea to the jurisdiction and granted a temporary injunction blocking the contract awards and similar steps in a related STAR Kids procurement.
- The trial court found that Plaintiffs had a probable right to relief and would suffer imminent, irreparable harm without injunctive relief, given the massive disruption to Medicaid and CHIP beneficiaries, providers, and existing health plans.
- The Executive Commissioner appealed, but agreed to abide by the temporary injunction pending appellate review; Plaintiffs seek temporary relief from the Court of Appeals to preserve the injunction during appeal resolution.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Jurisdiction over ultra vires claims | Plaintiffs seek only prospective injunctive/declaratory relief, not damages, for ultra vires actions outside Defendant's authority | Defendant asserts sovereign immunity bars these claims; no jurisdiction | Court holds sovereign immunity does not bar claims—properly pled ultra vires suit for prospective relief |
| Statutory preferences in procurement | HHSC failed to apply mandatory statutory preferences (provider networks, quality initiatives, etc.) in award process | HHSC followed procurement process and RFP terms; preferences were considered adequately | Court finds HHSC did not apply required preferences as mandated by law—procurement violated statutes |
| Disclosure of confidential proposals | Unlawful disclosure to rival’s counsel fatally tainted procurement integrity, creating unfair advantage | Disclosure was unintended/cured by recall effort; did not impact outcome | Court finds disclosure irreparably compromised integrity—cannot assure fair consideration of proposals |
| Irreparable harm and public interest | Plaintiffs would suffer non-compensable, irreparable harm to business, membership, and contracts; public interest favors status quo and preventing disruption to care | Alleged harms are speculative or compensable in damages; public interest favors implementing new contracts | Court finds irreparable harm shown; public interest supports injunction to avoid massive disruption to beneficiaries |
Key Cases Cited
- In re Geomet Recycling LLC, 578 S.W.3d 82 (Tex. 2019) (appellate courts have power to grant temporary orders to preserve rights pending appeal)
- In re Abbott, 645 S.W.3d 276 (Tex. 2022) (courts may use temporary relief to maintain status quo during appeal)
- Tex. Educ. Agency v. Houston Indep. Sch. Dist., 609 S.W.3d 569 (Tex. App.—Austin 2020) (temporary relief may be warranted to prevent mootness and protect meaningful judicial review)
- In re Newton, 146 S.W.3d 648 (Tex. 2004) (status quo is the last, actual, peaceable, non-contested status which preceded the controversy)
