The bill, H.B. No. 5284, amends Section 540.0204 of the Government Code to establish new considerations for awarding contracts to managed care organizations (MCOs) under the Medicaid managed care program. The bill introduces a preference for organizations with significant participation from local healthcare providers who have historically served Medicaid and charity care patients. It also emphasizes the importance of continuity of care for at least three months beyond a recipient's Medicaid eligibility period, the need for diverse managed care plans to cater to different populations, and the capability of organizations to process Medicaid claims electronically.

Additionally, the bill stipulates that if an MCO is classified as a public benefit corporation, a five percent increase will be applied to its bid score when awarding contracts. In cases where multiple bids receive the same score, preference will be given to the public benefit corporation. The provisions of this bill will only apply to contracts awarded on or after its effective date of September 1, 2025, and implementation may be delayed if a federal waiver or authorization is required.