(a) The commission shall select the health plan providers under the program through a competitive procurement process. A health plan provider, other than a state administered primary care case management network, must hold a certificate of authority or other appropriate license issued by the Texas Department of Insurance that authorizes the health plan provider to provide the type of child health plan offered and must satisfy, except as provided by this chapter, any applicable requirement of the Insurance Code or another insurance law of this state.
(b) A managed care organization or other entity shall seek to obtain, in the organization’s or entity’s provider network, the participation of significant traditional providers, as defined by commission rule, if that organization or entity:
(1) contracts with the commission or with another agency or entity to operate a part of the child health plan under this chapter; and
(2) uses a provider network to provide or arrange for health care services under the child health plan.

(c) In selecting a health plan provider, the commission:
(1) may give preference to a person who provides similar coverage under the Medicaid program; and
(2) shall provide for a choice of at least two health plan providers in each service area.
(d) The executive commissioner may authorize an exception to Subsection (c)(2) if there is only one acceptable applicant to become a health plan provider in the service area.