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 who have historically served Medicaid and charity care patients, ensuring continuity of care for at least three months post-Medicaid eligibility, and considering the diverse needs of different populations.

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, enhancing its competitiveness in the contract awarding process. In cases where multiple bids receive identical scores, 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 federal waivers or authorizations are required.