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 amendments introduce specific criteria that the Health and Human Services Commission must follow when evaluating bids from MCOs. These criteria include giving preference to organizations with significant participation from local healthcare providers, ensuring continuity of care for at least three months after a recipient's Medicaid eligibility ends, and considering the diverse needs of different populations.

Additionally, the bill stipulates that if an MCO is a public benefit corporation, a five percent increase will be applied to its bid score, enhancing its competitiveness in the contract awarding process. In cases where multiple bids receive the same score, preference will be given to the public benefit corporation. The changes will take effect on September 1, 2025, and will apply only to contracts awarded after this date. The bill also includes a provision allowing state agencies to delay implementation if a federal waiver or authorization is required.