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VFC [Vaccines for Children] Issues in CHIP [Children’s Health Insurance Program]
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07/30/98 17:53
CONG JANE HARMAN
->
94562878
NO. 120 P001
36TH DISTRICT, CALIFORNIA
325 CANNON BUILDING
WASHINGTON. DC 20515
(202) 225-8220
COMMITTEES:
Congress of the United States
DISTRICT OFFICES
NATIONAL SECURITY
1217 EL PRADO AVENUE
MERCHANT MARINE
PERSONNEL
House of Representatives
TORRANCE. CA 90501
(310) 783-8220
RESEARCH AND DEVELOPMENT
Washington, DC 20515-0536
583VENICE BLVD
SUITE E
PERMANENT SELECT COMMITTEE
VENICE, CA 90291
ON INTELLIGENCE
(310) 581-9011
TECHNICAL AND TACTICAL INTELLIGENCE
REP.HARMAN@MAIL HOUSE GOV
STEERING
http//www.house.gov/narman,
FAX
To:
Jennifer Klein
Fax #:
456 - 2878
From:
David Flanders
Date:
7/30
Number of Pages: 7 , including cover sheet
PRINTED ON RECYCLED PAPER
07/30/98 17:53
CONG JANE HARMAN
94562878
NO. 120 P002
MEMO
TO:
Jennifer Klein, Office of the First Lady
From:
David Flanders, Office of Rep. Jane Harman
Subject:
Loss of vaccination coverage under Children's Health Insurance Program (CHIP)
Date:
July 30, 1998
Chris Jennings suggested you might be of assistance in resolving a problem generated by a HCFA
interpretation of states' implementation of the State Children's Health Insurance Program (CHIP),
enacted last August by the Balanced Budget Act. Rep. Jane Harman and Sen. Dianne Feinstein
have proposed legislation to address this problem. I look forward to meeting with you soon to
discuss this issue and our proposed fix in further detail.
Background
The Balanced Budget Act created the CHIP program to allow states to provide health insurance
to children at, or below, 200 percent of the poverty level by either expanding Medicaid, creating a
separate state program using private insurers, or a combination of both. In a May 11 letter
(attached), HCFA notified state health officials that states that opt to create a separate state
program can no longer immunize those children under a 1993 federal program that provides
vaccines to states free of cost for low-income and uninsured kids (the Vaccines for Children
program). As a consequence, there are higher costs to states for delivering vaccines to CHIP
children, and potentially far fewer children will receive the health benefits Congress intended when
it passed the Balanced Budget Act.
HCFA argues that, because the Vaccines for Children program defines eligibility as being
uninsured, on Medicaid, or of American Indian or Alaskan heritage, CHIP kids participating in
separate state programs are ineligible for the free immunizations because they can no longer be
considered "uninsured."
This ruling in effect penalizes states that opt, under the BBA CHIP provision, to create a separate
state program, since these same children would continue to be covered under Vaccines for
Children if states expanded their Medicaid programs.
Impact on States
Fifteen states are implementing CHIP by developing separate state programs: California,
Colorado, Michigan, New York, North Carolina, Oregon, Pennsylvania, Vermont, Arizona,
Delaware, Georgia, Kansas, Kentucky, Montana, Nevada, Virginia. Eight more states will rely on
a combination of expanded Medicaid and private insurers: Alabama, Connecticut, Florida,
Massachusetts, New Jersey, Maine, New Hampshire.
In California, which exercised the option provided by CHIP to offer coverage through a separate
State program known as Healthy Families, 580,000 children stand to lose their free immunization
benefit if the HCFA ruling is allowed to stand. The costs to California of providing
04/02/98 THU 16:52 FAX 202 456 5581
DOMESTIC POLICY COL
001
VFC.LTR
Page 1
To: Sennifer Uein
Please call any
From: Jeanne
comments into
Jenni for Ryan
Dear State Health Official:
insurance
690-6001.
Thank!
The Balanced Budget Act of 1997 established the Children's Health Insurance
Program (CHIP) under Title XXI of the Social Security Act (the Act). This new Title
enables States to expand health insurance coverage for uninsured children through
Medicaid, a State grant program, or a combination of the two. Title XXI requires
States to submit plans for approval by the Secretary of the Department of Health
and Human Services in order to receive funds for providing health care coverage.
The Department of Health and Human Services has issued several letters to provide
policy and State plan guidance on the implementation of Title XXI.
This letter is intended to provide detailed guidance regarding coverage of
immunization under Title XXI and the Vaccines for Children (VFC) program.
States must ensure coverage for childhood vaccinations under CHIP. Section
2102(a)(7) of the Children's Health Insurance Program requires States to "assure
the quality and appropriateness of care, particularly with respect to
immunizations" provided under the State child health plan. The generally accepted
standard for appropriate care with respect to childhood immunizations, used in the
Medicaid and the Vaccine for Children programs, is the schedule of immunizations
recommended by the Federal Advisory Committee on Immunization Practices
(ACIP). All State CHIP plans must provide coverage for all ACIP recommended
vaccines to enrollees. The Department expects that children will be immunized by
their primary care provider as part of an overall preventive health plan. J ?
is different than what sagpenthe next page
The Vaccines For Children (VFC) program was established primarily to serve
which Medicaid condinsured, includes
as
children defined as "federally vaccine eligible" under section 1928(b)(2)
Children
seen in federally qualified health centers (FQHC) or rural health centers (RHCs)
childrens well
whose insurance does not cover immunizations are also eligible for VFC.
CHIP children who are newly eligible for Medicaid under Title XXI are federally
vaccine eligible, as are all other children eligible for Medicaid. However, States
which have designed a separate State insurance program under CHIP (S-CHIP) may
not treat children enrolled in such a program as federally vaccine eligible. Title XX
enrolled children are neither "Medicaid eligible"nor "uninsured" and therefore, they
State separate enrolled
are not federally vaccine eligible. We do not have clear statutory authority to
define children enrolled in an CHIP plan as "federally vaccine eligible." States,
Sturance programs
however, may define these children as "state vaccine eligible" under Section
1928(b)(3).
children enrolledin
a Exparate State insurance from
pro
04/02/98 THU 16:52 FAX 202 456 5581
DOMESTIC POLICY COL
5
002
VFC.LTR
Page 2
Ensuring that all children receive appropriate immunizations is a priority for the
President, First Lady and Secretary. States are encouraged to work through their
State Health Departments and their State Immunization Programs to determine the
most effective manner in which to purchase vaccines for S-CHIP children. For
example, if a State chooses to define Title XXI enrolled children as "state vaccine
eligible," then the State may purchase vaccine at the federal contract price for
these children. Expenditures associated with the purchase of vaccines for S-CHIP
children that meet the requirements of Section 2103 are not subject to the 10
percent cap on expenditures for administration, outreach, other child health
assistance, and health services initiatives as long as the vaccines are sold to the
managed care organizations or providers and not provided directly to children by the
state. As part of the State's program evaluation strategy, States are strongly
encouraged to track the percentage of children in Title XXI who are receiving age
appropriate vaccinations and how those vaccinations are being delivered.
1 hope this guidance will be helpful. If there are any questions regarding coverage
of immunization under Title XXI, please contact your HCFA regional office staff.
Sincerely yours,
Sally K. Richardson
Director
Center for Medicaid and State Operations
MAR-13-1998 14:06
HON HENRY WAXMAN
202 225 4099 P.02/03
2204 RAYBURN House OFFICE BUILDING
RANKING MEN
WASHINGTON, DC 20515-0529
COMMITTEE ON GOVERNMENT
(202) 225-3978
REFORM AND OVERSIGHT
MEMBER
DISTRICT OFFICE:
COMMITTEE ON COMMERCE
8438 WEST 30 STREET
SUITE 600
Congress of the United States
DEMOCRATIC STEERING COMMITTEE
Los ANGELES. CA 90048-4183
(213) 861-1040
house of Representatives
Mashington, DC 20515-0529
HENRY A. WAXMAN
29TH DISTRICT, CALIFORNIA
March 13, 1998
Nancy Ann Min DeParle
Administrator
Health Care Financing Administration
200 Independence Avenue, SW
Washington, D.C. 20201
Dear Nancy Ann:
I understand that HCFA currently has under consideration a
request from California to have access to the Vaccines For
Children program for those children enrolled in the Healthy
Families program.
I strongly support their request, and indeed believe that
access to VFC vaccines for children covered through the
Children's Health Insurance program is entirely appropriate,
whether those children are covered in State programs that have
elected to expand Medicaid coverage or to establish a separate
State program using private insurers.
Our original intent in enacting the VFC program was to
increase the immunization rate among low-income children through
the provision of no-cost vaccine. While at the time of
enactment, we did decide not to extend coverage to children who
were privately insured, obviously we were acting at a time prior
to the enactment of the Children's Health Insurance Program.
When CHIP was enacted, it was targeted at low-income
uninsured children. While it would have been my personal
preference to spend these dollars expanding Medicaid coverage,
the legislation that we enacted clearly gave States a choice of
expanding traditional Medicaid, establishing a separate State
program, or both. And clearly use of private insurance coverage
was envisioned as one possible option for coverage.
It would be illogical and counterproductive to establish a
program for uninsured children and allow States to buy them into
private coverage, but then to say because they were now enrolled
with private insurers that they no longer qualified as uninsured
for purposes of the VFC. In my view, such an interpretation was
clearly not the intent of the Congress.
MAR-13-1998 14:07
HON HENRY WAXMAN
202 225 4099 P.03/03 .
The goal of the VFC was to assure that low-income children
received their vaccines in the most effective way possible. The
goal of CHIP was to bring quality health care coverage to low-
income children. Certainly coverage under both programs is
compatible and desirable.
I urge you to clarify HCFA policy that VFC coverage is
indeed available for children enrolled in CHIP, whatever option
States have selected to provide that coverage.
with kind regards, I am
Sincerely,
Hony a Waxma
HENRY A. WAXMAN
Member of Congress
HAW: gw
TOTAL P.03
MAR-17-1998 15:10
HCFA LEGISLATION
DRAFT
VFC and CHIP
Q:
Are Title XXI beneficiaries eligible for the Vaccines for Children (VFC) program?
A:
The VFC program was established to serve children who are eligible for Medicaid
or are uninsured. American Indian/Alaskan Native children and children whose
insurance does not cover immunizations are also eligible for VFC. However,
children who are under-insured for immunization coverage can only receive
immunizations at Federally Qualified Health Centers or rural health centers.
Children who are newly eligible for Medicaid under Title XXI are VFC eligible, as
are all other children eligible for Medicaid. However, States who have designed a
separate State insurance program under CHIP (S-CHIP) cannot serve Title XXI
beneficiaries enrolled in their S- CHIP plan through the VFC program.
States are encouraged to work through their State Health Departments and their
State Immunization Programs to determine the most effective manner to purchase
vaccines for S-CHIP.
As long as the expenditures associated with purchasing vaccine for State-vaccine-
eligible S-CHIP children meet the requirements of section 2103, they are
considered to be child health assistance. These expenditures would not be limited
by the 10% cap on administration, outreach, other child health assistance, and
health services initiatives. Expenditures that do not meet the requirements of
section 2103 are subject to the 10% cap.
States should be aware that immunization is a required benefit under Title XXI,
regardless of whether a State chooses to expand Medicaid or create an S-CHIP
program. When establishing guidelines for immunization in their Title XXI
funded programs, States must include coverage of all the immunizations
recommended by the Advisory Committee on Immunization Practices in
accordance with periodicity schedules prescribed by that body.
TOTAL P.02
MAR-17-1998
07:58
HCFH LEGISCATION
Page 2 - Douglas Porter
1.
Administrative Vendor Contract
Our primary concern has been the potential conflict of interest that would result; should
the administrative vendor contract be awarded to a health plan participating in the Healthy
Families program. Our understanding is that the contractor is not counseling and referring
beneficiaries to health plans and sufficient firewalls are in place to separate health plan
operations from administrative vendor operations to prevent any conflicts of interest
should the contract be awarded to a health plan. Based on this, we would not object to
the use of the administrative vendor as long as the above conditions are met.
2.
Application Assistance Fee
Under the Title XXI statute, outreach activities include informing families with children
likely to be eligible for Title XXI of the availability of the program and assisting them in
applying
to such a program. Therefore, the Department approves the State's request to pay
persons in non-Medicaid outstation locations (e.g., insurance brokers and insurance
agents) the $25 application assistance fee from MRMIB for assisting with applications that
result in the enrollment of a child into either Title XIX or Title XXIas a result of the
State's joint application process Furthermore, the Department also approves the State's
request to pay persons in Medicaid outstation locations the $25 application assistance fee
from DHS for assisting with applications that result in the enrollment of a child into either
Title XIX or Title XXI as a result of the State's joint application process.
HHS would like to clarify, however, that the current principles of cost allocation (as
described in the Office of Management and Budget's Circular A-87 and other appropriate
HHS documents) apply to all non-outreach administrative expenditures for joint Title
XIX/Title XXI activities. In addition, as with all Federally funded public programs, the
State will need to submit its administrative payment methodologies to HHS as part of the
State's cost allocation plan.
Section 4.4.1
3.
Resource Disregard
In our last letter, we asked you to consider establishing a threshold amount related to your
resource disregard for determining who would be newly eligible for enhanced payments.
Based on your reply, we have reexamined the process and have determined that the two
additional questions on the Medi-Cal portion of the application are sufficient for
identifying children who are newly. eligible for the enhanced match as a result of the
resource disregard.
LEGISLATION
Page 3 . Douglas Porter
4.
Income Disregard
Federal law prectudes certain indome from being counted in determining eligibility under
programs supported by Federal matching funds (e.g., Agent Orange payments). Please
provide the Department with an assurance that you will not count such income under the
Healthy Families program when determining eligibility.
Section 6. Coverage Requirements for Children's Health Insurance
Section 6.1
5.
AIM Program
As discussed previously, Title XXI requires that you submit a copy of the actuarial
analysis of the benefit package for this program that shows it to be at least actuarially
equivalent to your benchmark plan.
Section 8. Cost Sharing and Payment
Section 8.2.1
6.
Family Value Package (FVP)
We appreciate your desire to provide additional choice to enrollees in health plan
selection. Under your proposal, enrollees would be able to elect a health plan in a Family
Value Plan, which meets all cost sharing requirements of Title XXI, or elect another health
plan that has the same benefit package but has higher cost sharing. While this may give
certain enrollees an additional choice of providers, it violates the cost sharing protections
that are included in the Title XXI statute because some children would be liable for cost-
sharing in excess of statutory limits In addition, the Department is concerned that adverse
selection could create a two-tiered system, in which the most impoverished, and therefore
often most at risk, children would enroll in the lower cost FVP plans. Over time, this
could jeopardize the financial health of the family value plans and their ability to deliver
required benefits. Therefore, please provide the Department with information regarding
how the plan will assure that the cost sharing for all program participants is within the
Title XXI allowable limits. In addition, please provide a description of the system that will
assure that copayments will not exceed the 5% of family income for all covered services
(e.g., dental).
We will be addressing this issue in the next set of Questions and Answers regarding the
Children's Health Insurance Program.
Page - Douglas Porter
7.
Copayment Amounts
You have proposed a $5 copayment for managed care visits and have asked for our
guidance regarding how this copayment conforms with the guidelines we issued on
February 13, The cost sharing guidelines issued on February 13 addressed the allowable
inflation adjustments based on fee-for-service rates and did not address the managed care
setting
In managed care settings, the lack of a specific dollar amount associated with a service
makes it difficult to use the fee-for-service schedule. Therefore, we are offering the
following new guidance for the managed care setting. First, States are strongly
encouraged to provide all services to beneficiaries with family incomes at or below 150
percent of the Federal Poverty Level (FPL) without imposing copayments. However,
States are permitted to impose up to a $5 copayment, although they should consider
imposing lower copayments for services that may cost less than $80 For example, for
prescription drugs, States should consider charging less than $5 copayments if the
prescriptions are generally low cost to fill. Additionally, there should be one copayment
for a bundled set of services, rather than copayments imposed for each service rendered
during a physician visit States may also vary copayments to encourage certain service use
(e.g., lower copayments for generic drugs). We will be addressing this issue in the next
set of CHIP Questions and Answers as well.
Section 9. Strategic Objectives and Performance Goals for the Plan Administration
Section 9.10
8.
Vaccine for Children Program (VFC)
You have asked whether you can use the VFC program to pay for immunizations for
children enrolled in Healthy Families. The Department will be issuing further guidance on
this issue.
As you know, the VFC program was established, by statute, to serve children who are
enrolled in Medicaid or are uninsured. American Indian/Alaskan Native children whose
insurance does not cover immunizations are also eligible for VFC. However, children who
are under-insured for immunization coverage can only receive immunizations at Federally
Qualified Health Centers or rural health clinics.
Children who are newly eligible for Medicaid under Title XXI are VFC eligible; as are all
other children eligible for Medicaid. However, States who have designated a separate
State insurance program under CHIP (S-CHIP), such as the Healthy Families Program,
cannot serve Title XXI beneficiaries enrolled in their S-CHIP plan through the VFC
LEGISLHTION
Page 5 - Douglas Porter
program. These children are neither "Medicaid eligible" nor "uninsured" Under Title
XXI, however, States must cover age appropriate immunizations for all enrolled children
including children enrolled in their S-CHIP plan We interpret this requirement to include
coverage of all vaccines recommended by the Advisory Committee on Immunization
Practices (ACIP).
States are encouraged to work through their State Health Departments and their State
Immunization Programs to determine the most effective manner to purchase vaccines for
S-CHIP. States may use Title XXI dollars to purchase vaccine for Title XXI enrolled
children at Federal contract price by making these children "State vaccine-eligible."
9.
Administrative Costs
Your proposal includes administrative costs of approximately 25 percent. The Title XXI
legislation is clear that administrative costs cannot exceed 10 percent of the State's total
computable expenditures under Section 2105(a) of the Social Security Act (the Act) and
the total computable expenditures for which the enhanced FMAP is available under
Section 1905(u)(2) and (u)(3) of the Act. Therefore, the State will have to confirm in its
plan that it will not request Federal matching payments on costs that exceed the 10 percent
limit. Please be assured, however, that we fully understand your financial needs in
establishing a new program and the pressure for increased administrative funds in the early
years of a new program This is an issue that affects not only California, but also several
other States. We appreciate the gravity of your concern and are open to possible
legislative options that would remedy this issue in the future. Regrettably, this does not
address the immediate concern.
The members of the review team would be happy to answer any questions you may have in regard
to this letter and to assist your staff in formulating a response. Please sendyour response, either
on disk or electronically, as well as in hard copy to Kathleen Farrell, project officer for
California's Title XXI proposal, with a copy to Richard Chambers, Associate Administrator for
the HCFA Region IX Division of Medicaid. Ms. Farrell's internet address is
[email protected]. Her mailing address is:
Division of Integrated Health Systems
Health Care Financing Administration
Mail Stop C3-18-26
7500 Security Boulevard
Baltimore, Maryland 21244-1850
Page 8 - Douglas Porter
We appreciate the efforts of your staff and share your goal of providing health care to low-
income, uninsured children through Title XXI If you have questions or conterns regarding the
matters raised in this letter, your staff may contact either Ms. Farrell at (410) 786-1236 or
Mr. Chambers at (415) 744-3568. They will provide or arrange for any technical assistance you
may require in preparing your response. Your cooperation is greatly appreciated. We look
forward to continuing to work with you to provide health care coverage to uninsured, low-
income children in California.
Sincerely,
Richard Fenton
Deputy Director
Family and Children's Health Programs Group
Center for Medicaid and State Operations
cc: ARA, DSMO, Region IX
TOTAL P.06
FAX TRANSMITTAL
Jennifer Klein
TO:
Special Assistant to the President
for Domestic Policy
Telephone Number:
Fax Number
# of Pages
202-456-2878
(including cover sheet)
3
Stan Dorn
Director, Health Division
FROM:
CHILDREN'S DEFENSE FUND
Date: 3/10/98
Telephone Number:
Fax Number
Time: 5:30 p.m.
(202) 662-3551
(202) 662-3560
Please call 662-3595 or 662-3551 if you did not receive all of this fax
transmission.
THE 100% CAMPAIGN:
Health Insurance for Every California Child
(A coordinated effort of Children Now, the Children's Defense Fund and the
Children's Partnership)
March 10, 1998
The Honorable Donna Shalala
Secretary, U.S. Department of Health and Human Services
200 Independence Avenue, SW
Washington, DC 20201
Dear Secretary Shalala:
We are writing to convey our strong conviction that children in California's Healthy
Families Program and other non-Medicaid programs funded under the State Children's Health
Insurance Program (CHIP) must be included in the Vaccines for Children (VFC) program.
During the Clinton Administration, our country has made astonishing strides immunizing
young children, due in significant part to VFC. As recently as 1992, only 55% of all two-year-olds
were fully immunized. By 1996, that proportion rose to 78%. As you know, in recent years most
vaccine-preventable illnesses have dropped to their lowest levels ever recorded. Denying VFC to
CHIP children covered by non-Medicaid programs would undermine one of the Administration's
key public health goals -- increasing childhood immunization rates.
Today, whenever a vaccine is recommended for universal use by the National Vaccine
Advisory Committee of the Centers for Disease Control and Prevention, VFC automatically
purchases and disseminates, free of cost to provider, patient and the state, vaccines for children who
are uninsured, Native American or covered by Medicaid. Nothing in the CHIP statute requires
coverage of all federally recommended vaccines. Without VFC, states would have to spend their
own funds purchasing vaccine, often at much higher prices than the federal government obtains
through volume discounts. States may have an incentive to save money by delaying coverage of
new vaccines coming on line, which are very costly, but which can be lifesaving. Why subject
CHIP children to the risk of going without the full range of necessary vaccines?
CHIP children covered by non-Medicaid programs formerly were uninsured and covered by
VFC. CHIP's purpose is improving these children's access to essential health care, including
immunizations. The CHIP statute should not be construed to reduce their access to immunizations
by ending their right to VFC.
Children covered by Medicaid are much more likely to be immunized today than in the past,
thanks to VFC. Children covered by non-Medicaid programs for low-income children, like Healthy
Families, need VFC just as much. It would be difficult to justify treating the identical group of
low-income children differently, based simply on whether they happen to live in a state that has
chosen to implement CHIP through Medicaid or through a non-Medicaid program.
In fact, the law extends VFC to CHIP children, even if their state uses a non-Medicaid plan.
The VFC statute covers children who are not "entitled to benefits under a health insurance policy or
plan...." (emphasis added) The CHIP statute clearly states, "Nothing in this title shall be construed
as providing an individual with an entitlement to child health assistance under a State child health
plan." (emphasis added). In effect, CHIP children are viewed as uninsured for purposes of VFC.
The Honorable Donna Shalala
March 10, 1998
Page 2
Your commitment to child health generally, and children's immunizations in particular, has
been extraordinary. Please continue to hold true to that commitment in deciding the present issue.
Sincerely,
Patty Freeman
Stan Dorn
Wendy Lazarus
Senior Health Policy Associate
Health Division Director
Director
Children Now
Children's Defense Fund
Children's Partnership
c.c.
Chris Jennings
Jeanne Lambrew
Jennifer Klein
Deborah Chang
Earl Fox
Nancy-Ann Min-DeParle
Richard Fenton
Vice President Albert Gore, Jr.
WHCAISS.312
Page 1
Douglas Porter
Deputy Director
Medical Care Services
714 P Street, Room 1253
Sacramento, California 95814
Dear Mr. Porter:
Thank you for your March 4 response regarding your State Children's Health
Insurance Program under Title XXI of the Social Security Act. I wanted to provide
you with the Department's decisions concerning several substantive issues in your
Title XXI State Plan submission that we have previously discussed. Specifically,
these concern the administrative vendor contract, the cost sharing of the Family
Value Packages (FVP), amount of copayments, and administrative costs.
Additionally, further clarification is necessary regarding some of your responses.
Section 4. Eligibility Standards and Methodology
Section 4.3
1.
Administrative Vendor Contract
Our primary concern regarding the administrative vendor contract is the
potential conflict of interest that would result should the contract be
awarded to a health plan participating in the Healthy Families program. Our
understanding is, however, that the contractor is not counseling and enrolling
beneficiaries in health plans and there are sufficient firewalls in place to
separate health plan operations from administrative vendor operations to
prevent any conflicts of interest should the contract be awarded to a health
plan. In light of the high of level of concern raised by constituents in the
State, we echo their concern and strongly encourage you to be vigilant in
monitoring the activities of the contractor to assure that clients are protected
from improprieties or subtle practices that might result in steering enrollees
to particular health plans. Please be advised, however, that if the
administrative vendor is subsequently found to be conducting counseling and
enrollment in violation of the Federal fraud and abuse requirements, the
contractor would potentially be at risk of criminal penalties and further action
by the State may be necessary.
2.
Application Assistance Fee
NOTE TO REVIEWERS: THIS ISSUE IS STILL UNDER DISCUSSION AND MAY BE
WITHDRAWN.
The funding of this fee must be allocated to the program in which the
WHCAISS.312
Page 2
beneficiary is enrolled and not according to the type of organization
providing the assistance, as described in your response 12.a. Therefore, the
assistance fee for children enrolled in Medi-Cal would have to be funded
through the Department of Health Services and children enrolled in Healthy
Families would have to be funded through MRMIB.
Page 2 - Douglas Porter
Section 4.4.1
3.
Resource Disregard
In our last letter we asked you to consider establishing a threshold amount
related to your income disregard for determining who would be newly eligible
for enhanced payments. Based on your reply, we have relooked at the
process and have determined that the two additional questions on the
Medi-Cal portion of the application are sufficient for identifying children who
are newly eligible for the enhanced match as a result of the income
disregard.
On another related matter, Federal law precludes certain income from being
counted in determining eligibility under programs supported by Federal
matching funds, e.g., Agent Orange payments. Please provide an assurance
that you will not count such income under the Healthy Families program
when determining eligibility.
Section 6. Coverage Requirements for Children's Health Insurance
Section 6.1
4.
A.I.M. Program
As we have previously discussed, we would like a copy of actuarial analysis
of the the benefit package for this program that was developed by Leslie
Peters of Coopers' and Lybrand.
Section 8. Cost Sharing and Payment
Section 8.2.1
5.
Family Value Package (FVP)
We appreciate your desire to provide additional choice to enrollees in health
WHCAISS 312
Page 3
plan selection. Under your proposal, enrollees would be able elect a health
plan in a Family Value Plan, which meets all cost sharing requirements of
Title XXI, or elect another health plan that has the same benefit package but
has higher cost sharing. However, while this gives allows enrollees with
additional choice of providers, it violates the cost sharing protections that
are included in the Title XXI statute. In addition, the Department is
concerned that this could potentially create a two-tiered system, in which the
most impoverished or sick and therefore often most at risk, children would
enroll in the lower cost FVP plans that could be of lower quality, resulting in
adverse selection. Therefore, you will need to address how the plan will
assure that the cost sharing for all program
WHCAISS 312
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Page 3 - Douglas Porter
participants is within the Title XXI allowable limits.
6.
Copayment Amounts - You have proposed a $5 copayment for managed care
visits and have asked for our guidance regarding how this copayment
conforms with the guidelines we issued on February 13.
The cost sharing guidelines issued on February 13 addressed the allowable
inflation adjustments based on fee-for-service rates and did not address the
managed care setting. In managed care settings, we offer the following
new guidance. First, states are strongly encouraged to provide all services to
beneficiaries with family incomes at or below 150 percent of the Federal
Poverty Level (FPL) without imposing copayments However, States are
permitted to impose up to a $5 copayment, although they should consider
imposing lower copayments for services that may cost much less than $80
For example, in prescription drugs, States should consider not charging $5
copayments if the prescriptions are generally low cost to fill under fee for
service. Additionally, there should be one copayment for a bundled set of
services, rather than copayments imposed for each service rendered during a
physician visit.
REWRITE: In managed care settings, the lack of a specific dollar amount
associated with a service makes it difficult to use the fee-for-service
schedule. Thus, States are permitted to impose up to a $5 copayment on
any service, although they should consider imposing lower copayments for
services that may cost much less than $80. Additionally, there should be
one copayment for a bundled set of services, rather than copayments
imposed for each service rendered during a physician visit. States also may
vary copayments to encourage certain service use (e.g., lower copays for
generic drugs).
Section 9. Strategic Objectives and Performance Goals for the Plan Administration
Section 9.10
7.
Vaccine for Children Program (VFC) TO DISCUSS
You have asked whether you can use the VFC program to pay for
immunizations for children enrolled in Healthy Families. As you know, the
WHCAISS.312
Page 5
VFC program was established to serve children who were enrolled in
Medicaid or were uninsured. American Indian/Alaskan Native children and
children seen in Federally qualified health centers whose insurance does not
cover immunizations are also eligible for VFC. Children who are enrolled in
Title XXI through a State operated CHIP, such as the Healthy Families
Program, are considered insured, and as such, are not eligible to be served
through this program.
8.
Administrative Costs
The Title XXI legislation is clear that administrative costs cannot exceed 10
percent of the State's total computable expenditures under Section 2105(a)
of the Social Security Act (the Act) and the total computable expenditures
for which the enhanced FMAP is available under Section 1905(u)(2) and
(u)(3) of the Act. Therefore, the State will have to state in its plan that it
will not request Federal matching payments on costs that exceed this limit.
Please be assured, however, that we fully understand your financial needs in
establishing a new program and the pressure for increased administrative
funds in the early years of a new program and that we are open to will work
with you to find possible legislative solutions.
Under Section 2106(c) of the Social Security Act, HCFA must either approve,
disapprove, or request additional information on a proposed Title XXI State Plan
within ninety days. This letter constitutes our notification that specified additional
information is needed in order to fully assess your plan. The 90-day review period
has been stopped by this request and will resume as soon as a substantive
response to all of the enclosed questions is received. Please be advised that
because the 90 review period has almost expired, unless your response to this
letter substantively addresses all the issues we have included in this letter, we will
be required to disapprove your plan.
The members of the review team would be happy to answer any questions you
may have in regard to this letter and to assist your staff in formulating a response.
Please send your response, either on disk or electronically, as well as in hard copy
to Kathleen Farrell, project officer for California's Title XXI proposal, with a copy to
Richard Chambers, Associate Administrator for the HCFA Region IX Division of
Medicaid. Ms. Farrell's internet address is [email protected]. Her mailing
address is:
Division of Integrated Health Systems
Health Care Financing Administration
Mail Stop C3-18-26
7500 Security Boulevard
WHCAISS.312
Page 6
Baltimore, Maryland 21244-1850
We appreciate the efforts of your staff and share your goal of providing health care
to low-income, uninsured children through Title XXI. If you have questions or
concerns regarding the matters raised in this letter, your staff may contact either
Ms. Farrell at (410) 786-1236 or
Mr. Chambers at (415) 744-3568. They will provide or arrange for any technical
assistance you may require in preparing your response. Your cooperation is greatly
appreciated.
Sincerely,
Richard Fenton
Deputy Director
MAR-16-1998 13:18
ADMINISTRATOR'S OFFICE
202 690 6362 P.02/03
please provide a description of the system that will assure that copayments will not exceed
the 5% of family income for all covered services.
We will be addressing this issue in the next set of Questions and Answers regarding the
Children's Health Insurance Program.
7.
Copayment Amounts
You have proposed a $5 copayment for managed care visits and have asked for our guidance
regarding how this copayment conforms with the guidelines we issued on February 13. The
cost sharing guidelines issued on February 13 addressed the allowable inflation adjustments
based on fee-for-service rates and did not address the managed care setting.
In managed care settings, the lack of a specific dollar amount associated with a service makes
it difficult to use the fee-for-service schedule. Therefore, we are offering the following new
guidance for the managed care setting. First, States are strongly encouraged to provide all
services to beneficiaries with family incomes at or below 150 percent of the Federal Poverty
Level (FPL) without imposing copayments. However, States are permitted to impose up to
a $5 copayment, although they should consider imposing lower copayments for services that
may cost less than $80. For example, for prescription drugs, States should consider charging
less than $5 copayments if the prescriptions are generally low cost filled under fee-for-service.
Additionally, there should be one copayment for a bundled set of services, rather than
copayments imposed for each service rendered during a physician visit. States may also vary
copayments to encourage certain service use (e.g., lower copays for generic drugs). We will
be addressing this issue in the next set of CHIP Questions and Answers as well.
Section 9. Strategic Objectives and Performance Goals for the Plan Administration
Section 9.10
8.
Vaccine for Children Program (VFC)
You have asked whether you can use the VFC program to pay for immunizations for children
enrolled in Healthy Families. The Department will be issuing further guidance on this issue.
As you know, the VFC program was established, by statute, to serve children who are
enrolled in Medicaid or are uninsured. American Indian/Alaskan Native children whose
insurance does not cover immunizations are also eligible for VCF. However, children who
are under-insured for immunization coverage can only receive immunizations at Federally
Qualified Health Centers or rural health centers.
clinics
MAR-16-1998 13:18
ADMINISTRATOR'S OFFICE
202 690 6362 P.03/03
Children who are newly eligible for Medicaid under Title XXI are VFC eligible, as are all
other children eligible for Medicaid. However, States who have designated a separate State
insurance program under CHIP (S-CHIP), such as the Healthy Families Program, cannot
serve Title XXI beneficiaries enrolled in their S-CHIP plan through the VFC program.
However,
Under Title XXI, States must cover age appropriate immunizations for all enrolled children
We interpret this requirement to include coverage of all vaccines recommended by the
including
Advisory Committee on Immunization Practices (ACIP).
children
imolled
States are encouraged to work through their State Health Departments and their State
in there
Immunization Programs to determine the most effective manner to purchase vaccines for S-
SCHIP
CHIP. States may use Title XXI dollars to purchase vaccine for Title XXI enrolled children
plan
and the public sector price.
9.
Administrative Costs
Your proposal includes administrative costs of 25???%. The Title XXI legislation is clear that
administrative costs cannot exceed 10 percent of the State's total computable expenditures
under Section 2105(a) of the Social Security Act (the Act) and the total computable
expenditures for which the enhanced FMAP is available under Section 1905(u)(2) and (u)(3)
of the Act. Therefore, the State will have to confirm in its plan that it will not request
Federal matching payments on costs that exceed the 10 percent limit. Please be assured,
however, that we fully understand your financial needs in establishing a new program and the
pressure for increased administrative funds in the early years of a new program This is an
issue that affects not only California, but also several other States. We appreciate the gravity
of your concern and are open to possible legislative options that would remedy this issue in
the future. Regrettably, this does not address the immediate concern.
Under Section 2106(c) of the Social Security Act, HCFA must either approve, disapprove, or request
additional information on a proposed Title XXI State Plan within ninety days. This constitutes our
notification that specified additional information is needed in order to fully assess the concerns raised
in this letter. The 90-day review period has been stopped by this request and will resume as soon as
a substantive response to all of the enclosed questions is received. Please be advised that because
the 90-day review period has almost expired, unless your response to this letter substantively
addresses all the issues we have included in this letter, we will be forced to disapprove your plan.
The members of the review team would be happy to answer any questions you may have in regard
to this letter and to assist your staff in formulating a response. Please send your response, either on
disk or electronically, as well as in hard copy to Kathleen Farrell, project officer for California's Title
XXI proposal, with a copy to Richard Chambers, Associate Administrator for the HCFA Region IX
Division of Medicaid Ms. Farrell's internet address is [email protected]. Her mailing address
is:
Division of Integrated Health Systems
Health Care Financing Administration
TOTAL P.03