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Texas Medicaid Managed Care
Managed Care History

Managed Care Home
Texas Medicaid Home

About Managed Care
 - History
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 - 1915(B) Waiver
 - HHSC/HMO Contract
 - Enrollment Information

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 - Asthma Project
 - Expedited Eligibility for
    Pregnant Women
 - Newborn Enrollment
 - Newborn ID Project

Provider Info
 - STPs
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Program Description:

In 1991, the Texas Department of Health, created the Bureau of Managed Care as a result of House Bill 7 passed by the 72nd Texas Legislature. House Bill 7 mandated the establishment of Medicaid managed care pilot projects which utilize proven approaches for delivering comprehensive health care.

In managed care, each client may choose a primary care provider (PCP) who is responsible for ensuring the continuity and quality of care. The PCP is also responsible for administering preventive and primary care, including medical screens and immunizations. When specialized or acute care is necessary, the PCP serves as the manager of care by referring the client to other health care providers for those services. Through coordination of medical services, the program is designed to achieve five main objectives:

  • Improved access to care
  • Improved quality of care
  • Improved client and provider satisfaction
  • Improved cost effectiveness
  • Improved health status

The first pilot program was implemented on August 1, 1993, in Travis County. This pilot, the LoneSTAR (State of Texas Access Reform) Health Initiative, which is now referred to as the STAR Program, included 38,000 Medicaid clients. The original Travis model incorporated a health maintenance organization (HMO) and a partial pre-paid health plan (PHP) into a single health care delivery system. This arrangement terminated on August 31, 1996. On September 1, 1996, the Travis Service Area was expanded as detailed below.

A second pilot program was implemented on December 1, 1993, in the Gulf coast area of Jefferson, Chambers, and Galveston counties. This project is based on a primary care case management (PCCM) model and currently serves approximately 40,000 members. Under this system, providers receive fee-for-service reimbursement and a monthly case management fee for providing primary care services. On December 1, 1995, this pilot program was expanded to include Hardin, Liberty, and Orange counties.

As a result of Senate Bill 10 passed by the 74th Texas Legislature, additional managed care sites have been implemented. On September 1, 1996, Medicaid clients were given the option of selecting one of four managed care plans in the Bexar County Service Area:

  • PCA Health Plans of Texas, Inc.
  • Community First Health Plans, Inc.
  • Rio Grande HMO, Inc. dba HMO Blue
  • State of Texas TDH STAR Health Plan

The Bexar Service Area is comprised of Bexar, Atascosa, Comal, Guadalupe, Kendall, Medina and Wilson counties and serves approximately 117,000 members.

Also, on September 1, 1996, clients in the Travis County Service Area were given the option of selecting between three HMOs:

  • PCA Health Plans of Texas, Inc.
  • Rio Grande HMO, Inc., dba HMO Blue
  • Foundation Health, a Texas Health Plan, Inc.

The Travis Service Area was expanded to include Bastrop, Blanco, Burnet, Caldwell, Hays, Lee, and Williamson counties. Enrollment is mandatory for the AFDC and AFDC-related Medicaid clients who reside in the service areas. Blind and disabled Medicaid clients who are not also Medicare eligible and who do not live in an institution are eligible to enroll on a voluntary basis.

On October 1, 1996, Medicaid managed care for mandatory and voluntary enrollee groups was implemented in the Tarrant and Lubbock Service Areas. Approximately 60,000 Medicaid clients in the Tarrant Service Area, which includes Tarrant, Hood, Johnson, Parker, Wise and Denton counties, were given the option of selecting one of the following HMOs:

  • PCA Health Plans of Texas, Inc.
  • Americaid Texas, Inc.
  • Rio Grande HMO, Inc., dba HMO Blue
  • Harris Methodist Texas Health Plan, Inc.

The 25,000 Medicaid clients in the Lubbock Service Area, which includes Lubbock, Crosby, Floyd, Garza, Hale, Hockley, Lamb, Lynn, and Terry counties, were given the opportunity to choose one of the following plans:

  • FirstCare
  • West Texas Health Plans, L.C.
  • State of Texas TDH STAR Health Plan

This page maintained by the Texas Medicaid/CHIP Office.  Comments and suggestions can be emailed to:  This page was last updated on February 29, 2008