Family- and Provider-Friendly Program Design
CHIP should be administratively simple for patients, physicians, and health care providers . Navigating complex state and health plan program requirements will discourage many families' participation, therefore defeating the program's intent. A system must be built which is easily understood and accessed by its users. Additionally, the program should be designed to keep children from the same family in one insurance program. A concern about using a non-Medicaid approach is that families with children of different ages will end up with younger children in Medicaid and older children in CHIP, creating barriers to timely, coordinated health care.
CHIP eligibility should be offered to the highest extent allowed by federal law. The majority of uninsured children in Texas live with families who earn less than 200 percent of poverty. TMA strongly supports offering CHIP coverage to all qualified families. Cost-sharing, as allowed by federal law, will help to promote responsible use of health care services.
Child-Specific Benefit Package
CHIP's benefit package should address the physical and mental health care needs of children. Appropriate medical specialties, such as pediatricians and child psychiatrists, should guide the benefit package's design. While there are pros and cons of Medicaid versus a non-Medicaid approach, one benefit of Medicaid is that it is designed primarily for children, emphasizing preventive and primary care services. Most private health insurance packages, on the other hand, are designed for adults. For example, most private insurers offer limited mental health counseling and substance abuse treatment, the behavioral health services most frequently needed by adolescents. If the state utilizes a non-Medicaid approach, it should work with physicians and other providers to tailor a benefit package appropriate for children . For a private sector approach, TMA advocates using the American Academy of Pediatrics' recommended Scope of Benefits as the template for a CHIP benefit package.
CHIP should be developed to benefit children with special health care needs. Most group health plans and insurers do not cover services needed by children with chronic illnesses or conditions. These services include long-term, respite, and rehabilitative care and home or community-based services. Participating CHIP plans should include these services within their benefit structure. Not only are such services typically more cost-effective than in-patient care or institutionalization, but they also contribute to a better quality of life for kids that require them.
Diverse Care Delivery Options
The State should actively explore using a private-sector model for CHIP, including options to allow families to enroll in existing employer- sponsored health care plans, medical-savings accounts, and other private insurance vehicles.
Children enrolled in CHIP should be assured a choice of physicians and health plans. This provision would encourage appropriate health plan competition, thereby promoting cost-effective, innovative approaches to service delivery. Moreover, it would allow patients to "walk with their feet" if dissatisfied with the quality or accessibility of services. Further, a choice of health plans will assure stability within the program should a health plan become financially insolvent.
Rural physicians, hospitals, and clinics should be included within the funding entities' networks.* A concern about the funding entities' proposal is that hospital districts and medical schools may begin building new clinics in rural communities, therefore competing with existing rural physicians and hospitals. Established clinics and providers should be included within the funding entities' networks. If services are unavailable within a community, however, the state should define criteria, with input from rural physicians, hospitals, county officials, and others, regarding when and where new facilities should be founded.
Safeguards for Safety-Net Providers
Mechanisms should be implemented to protect safety-net facilities' patient base. Hospital districts and other large safety-net facilities support a critical community function: indigent care. Their capacity to provide services to this population should not be diminished as a result of CHIP. To protect patient choice while also protecting safety-net institutions, the state should consider guaranteeing the funding entities a minimum patient enrollment or offering patients incentives, such as lower premiums or value-added services, to select the local funding entity's health plan. Community-based physicians and indigent care providers, such as children's hospitals, medical schools, rural health clinics, and federally-qualified health centers, should be included within the CHIP network(s) to preserve patient-physician relationships and protect continuity of care.
Fair Reimbursement
Health care providers participating in CHIP should be assured adequate reimbursement. Sufficient payment rates will allow CHIP plans to build geographically broad and diverse provider networks. Without adequate payment rates, many health care providers may opt not to participate in CHIP, particularly as they will incur higher administrative costs (e.g., preauthorization and referral requirements) by virtue of their participation.
Simplified Eligibility
The State should simplify Medicaid eligibility standards and enact presumptive eligibility for children in traditional Medicaid and CHIP. The state's rigorous, convoluted eligibility standards discourage many parents from enrolling their children in Medicaid. In fact, more than 500,00 Texas kids are estimated to be Medicaid eligible but not enrolled. Simplifying the state's Medicaid program would promote timely, appropriate access to services, thereby saving health care dollars through early detection of preventable health conditions and discouraging parents' reliance on costly emergency rooms. Examples of simplified eligibility are mail-in applications or shortened application processes.
Under the Balanced Budget Act, states now also have the authority to establish presumptive eligibility criteria for children. Presumptive eligibility is the process whereby qualified health care and social service providers certify a child for Medicaid for up to three months based on an initial assessment of the child's familial income and assets. This allows needy children to be treated at the time they arrive at a physician's practice or clinic without waiting several months for confirmation of their Medicaid status. Currently, Texas extends presumptive eligibility to pregnant women up to 185% of poverty.
The State should implement six to 12 months continuous coverage for traditional Medicaid and CHIP participants. Because of the state's strict Medicaid income and asset tests, many children monthly cycle on and off Medicaid as their parents' income rises and falls. Extending coverage for a defined six to 12 months protects continuity of care, prevents unnecessary delays in services, and is administratively less burdensome to the Medicaid system. Continuous coverage should be extended to existing Medicaid patients as well as those who enroll in CHIP. At a minimum, continuous eligibility should be available for children ages 1-5.
For children who lose Medicaid eligibility but are qualified for CHIP or employer-based coverage, the State should also consider extending Medicaid between the time the child loses Medicaid benefits and begins receiving services through CHIP or alternative coverage. This would prevent children from losing insurance benefits between insurance changes.
Broad Funding Options
The state should allocate dollars to secure federal matching funds. Using state dollars alleviates many provider and consumer concerns regarding the program's governance and management and ensures greater accountability to the state. Should the use of local dollars be necessary to supply the state's portion of the match, the state should formulate and apply appropriate standards to the funding entities, as enumerated in this document.
To preserve all available funding options, the State should direct the Health and Human Service agencies to include CHIP appropriations within their 1999-2001 budget requests. This directive would assure the 1999 Legislature the flexibility to fund CHIP should state monies ultimately be required in whole or in part.
The Rural Community Health System (RCHS) should be included as a funding entity, if feasible.* As a result of UTMB's decision to voluntarily limit its CHIP service-area expansion, 119 rural counties are now potentially left without CHIP coverage. In the proposal's place, the State is now offering rural counties three options: fund CHIP using county monies; do nothing and wait for the implementation of the Texas Healthy Kids Corporation; or allow UTMB to supply funds on the county's behalf. There is an alternative. The RCHS' enabling legislation allows the system to become a funding entity, thereby assuming responsibility for the provision of health care within rural communities. The RCHS is not yet functional, but it could potentially provide CHIP funds for many rural counties, eliminating the need for UTMB or counties to fund them all. In turn, the RCHS board could subcontract with other hospital districts and/or insurers to deliver services within rural areas until it is operational.
Strong State Oversight
Standards governing health plan access, quality, and financial stability should be applied to participating CHIP health plans. Whether using state or local tax dollars, CHIP plans must be accountable for the same consumer and provider safeguards as Medicaid managed care plans. These protections, enacted by the 74th and 75th Legislatures, include: patient and provider complaint and grievance appeal mechanisms; traditional Medicaid/indigent care provider protections; quality assurance mechanisms; financial solvency standards; timely reimbursement guidelines; and marketing and educational guidelines.
CHIP should be overseen and reviewed by a state advisory committee. The Medicaid program is reviewed by the state's Medical Care Advisory Committee and state agencies, therefore guaranteeing accountability and a mechanism for public input. Should the state implement a non-Medicaid children's health insurance model rather than expand Medicaid, the program should be overseen by a state advisory committee. This will ensure consistent application of access, quality, and cost standards. Committee members should include representatives from participating funding entities, health plans, physicians, hospitals, families, state agencies, and legislators.
Additionally, through the state advisory committee, there should be a process to allow health care providers and patients to file and resolve complaints or grievances about the CHIP program if they are unable to settle conflicts at the local level.
The State should establish a mechanism for timely, appropriate, and ongoing provider and public input into CHIP. Physicians and other health care providers intimately understand the health care and social needs of uninsured children as well as the structural barriers that prevent their families from accessing needed services. For the program to succeed, it is critical that physicians, including pediatric specialists, providers, and families contribute to its design and implementation.
* Note: These recommendations are based upon the "funding entity" proposal to use local tax dollars to fund the State's share of CHIP. Should the funding entity proposal not be pursued, the RCHS could contract with the State, just like any other HMO or insurer, to participate in any potential private-sector CHIP initiative.
Developed by the TMA Council on Socioeconomics and Committee on Child and Adolescent Health with input from the Texas Pediatric Society, Texas Academy of Family Physicians, and Children's Hospital Association of Texas.
For more information, contact Helen Kent Davis , Director, Governmental Affairs, at (800) 880-1300, ext. 1401.