Key Terms

• MANAGED CARE: The term “managed care” describes a type of health care focused on helping reduce costs while keeping quality of care high. Managed care was introduced in Texas in 1993 and is now the primary mode of care for people who have Medicaid or CHIP coverage.

• MANAGED CARE ORGANIZATIONS: Managed Care Organizations, or MCOs, are health insurers that contracts with the state to deliver Medicaid health benefits and additional services. These MCOs accept a set per member per month payment for these services. In Texas, there are currently 16 MCOs.

• MEMBER CHOICE: Allowing members to choose their health plan is an integral part of managed care. In fact, 70% of members actively choose their plan instead of being automatically assigned to a health plan by the state.

• STAR: Most people who have Medicaid in Texas get their coverage through the STAR program. STAR covers low-income children, pregnant women and families.

• CHIP: The Children's Health Insurance Program (CHIP) covers children in families that earn too much money to qualify for Medicaid but cannot afford to buy private insurance.

• SDA: A Service Delivery Area, or SDA, is a select group of counties, defined by HHSC, where different health insurance plans provide Medicaid and CHIP coverage. There are 13 SDAs in Texas.

• RFP: A request for proposal, or RFP, is a business document that announces a project, describes it, and solicits bids from qualified contractors to complete it. Texas uses the RFP model for managed care organizations to bid and secure Medicaid and CHIP contracts.