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This paper suggests methods of financing managed care for people with HIV or AIDS.
Note: This publication is no longer in circulation. However, a few copies may still exist in the Foundation’s internal library that could be xeroxed. Please email order@kff.org if you would like to pursue this option.
This side-by-side provides a comparison of Medicare current law with selected House and Senate provisions to the Balanced Budget Act of 1997.
State Responses to New Federal Health Programs
Protection in Managed Care Plans: A Side-by-Side Comparison of Proposed Federal Legislation. A side-by-side comparison of the provisions for consumer protection in managed care plans contained in the House and Senate budget reconciliation bills and in eight other consumer protection bills currently under consideration by Congress. These bills, which would increase the regulatory oversight of the managed care industry by the federal government, are compared in 22 different categories of managed care issues.
Children’s Health Insurance: 1997 Budget Reconciliation Provisions
A side by side of children’s health insurance budget reconciliation provisions comparing House and Senate bills as of 07/09/97.
Side-By-Side Comparison Of Proposed Federal Legislation For Consumer Protection In Managed Care Plans
Nicole Tapay, Karen Pollitz, Jalena Curtis
Institute for Health Care Research and Policy Georgetown University Medical Center
July 18, 1997
Issue Summary
Over the past decade, an increasing number of Americans have been receiving their health care coverage through HMOs, PPOs and other types of managed care entities. The growing influence of managed care, in turn, has led consumers and state and federal policy makers to raise questions about the appropriate roles and rights of consumers, providers, employers, purchasers, and insurers within this system. Areas of concern include: 1) whether plans provide sufficient access and choice for consumers; 2) what is the appropriate method to enable consumers to appeal plan decisions; and 3) what rights consumers have with respect to information about their health plans.
Most states have basic protections in place regulating HMOs and managed care plans that are subject to state law. In addition, there has been a surge of recent state legislative activity in this area which has augmented the sophistication and specificity of some of these laws. At the federal level, Medicare currently imposes certain requirements upon managed care plans contracting with the program. Federal standards for Medicaid managed care have been somewhat more general; as states move toward requiring managed care enrollment, federal legislation has been proposed to strengthen protections for Medicaid beneficiaries. Also at the federal level, ERISA, which governs self-funded employer plans, contains minimal requirements for such plans and virtually no protections specifically targeted at the managed care components of such plans.
In the 105th Congress, several bills of varying scope have been introduced to address an array of concerns relating to consumer and provider protections in health plans. In addition, Congressional Budget Reconciliation Bills suggest several changes in this area for Medicare and Medicaid. This document is a side-by-side comparison of many of the leading federal bills in these areas. It begins with the following brief description of the bills contained in the side-by-side comparison tables. The Medicare and Medicaid provisions of the House and Senate Budget Reconciliation Bills (House and Senate Budget Bills) are presented in Part I. The eight remaining bills discussed below, introduced in the House and/or Senate, are presented by topic in Part II.
Please note: This document includes certain acronyms; many of these are defined in the “Definitions” section at the end of the document.
H.R. 2015–House Budget Bill/Provisions Relating To Medicare Managed Care
The House Budget Bill would establish a new Medicare managed care program, MedicarePlus. Plan options include a variety of coordinated care plans. Importantly, this option does not preclude Medicare eligibles from choosing the traditional fee-for-service Medicare program. The House Budget Bill includes requirements relating to information disclosure, gag rules, grievance procedures, quality assurance, access to care, access to specialists, emergency services, continuity of care, privacy, provider protection, solvency standards for provider-sponsored organizations, and enforcement issues.
The House Budget Bill requires plans to disclose specified information to federal authorities and enrollees. It also includes a grievance/appeals system with internal and external mechanisms, including time limits and reviewer requirements for all grievances and appeals. Time frames are established for prior authorization determinations. Minimum requirements are established for internal quality assurance. The House Budget Bill requires plans to provide access to providers in service area within a reasonable time frame and to cover appropriate specialist treatment.
The House Budget Bill sets forth a process for provider-sponsored organizations (PSOs) to receive federal waivers from state laws that fall within specified categories. Solvency standards for PSOs will be set at the federal level. The House Budget Bill also sets forth open enrollment and information requirements to facilitate beneficiary choice and mobility among Medicare options.
Status: Passed by the House on June 25, 1997, and awaiting action by reconciliation conference committee. The House Budget Bill incorporates two separate proposals for Medicare, as passed by the committees of jurisdiction (Commerce and Ways and Means) with some slight variations.
S. 947–Senate Budget Bill/Provisions Relating To Medicare Managed Care
The Senate Budget Bill would establish a new Medicare managed care program, Medicare Choice. In general, the Senate Budget Bill is very similar to the House Budget Bill, with differences highlighted within the attached side-by-side chart. Plan options include a variety of coordinated care plans; Medicare eligibles can still choose the traditional fee-for-service program. The Senate Budget Bill includes requirements relating to information disclosure, gag rules, grievance procedures, quality assurance, access to care, access to specialists, emergency services, continuity of care, privacy, provider protection, solvency standards for provider-sponsored organizations, and enforcement issues.
The Senate Budget Bill requires plans to disclose specified information to federal authorities and enrollees. It also includes a grievance/appeals system with internal and external mechanisms, including time limits for all grievances and appeals and limited reviewer requirements. Time frames are established for prior authorization determinations. Minimum requirements are established for internal quality assurance. The Senate Budget Bill requires plans to provide access to providers in their service areas within a reasonable time frame and to cover appropriate specialist treatment.
The Senate Budget Bill sets forth a process for provider-sponsored organizations (PSOs) to receive waivers from state laws. Solvency standards for PSOs will be set at the federal level. The Senate Budget Bill also sets forth open enrollment and information requirements to facilitate beneficiary choice and mobility among Medicare options.
Status: Passed by the Senate on June 26, 1997, and awaiting action by reconciliation conference committee.
H.R. 2015–House Budget Bill/Provisions Relating To Medicaid Managed Care
The House Budget Bill incorporates selected consumer protection standards for Medicaid managed care enrollees. The House Budget Bill includes requirements relating to gag rules, grievance procedures, quality assurance, access to care, access to specialists, emergency services, and continuity of care. It requires plans to permit female enrollees access, without prior authorization, to obstetricians/gynecologists for routine care and to designate such physicians as their primary care providers. It requires plans to establish internal grievance procedures that meet federal standards, including timeliness of considerations. It requires plans to follow quality standards. The House Budget Bill also prohibits restrictions on medical communications between providers and patients.
Status: Passed by the House on June 25, 1997, and awaiting action by reconciliation conference committee.
S. 947–Senate Budget Bill/Provisions Relating To Medicaid Managed Care
The Senate Budget Bill sets forth protections for Medicaid beneficiaries enrolled in managed care plans. The Senate Budget Bill includes requirements relating to information disclosure, grievance procedures, quality assurance, utilization review, access to care, access to specialists, emergency services, protections relating to covered benefits, discrimination, continuity of care, and enforcement issues. It permits states to mandate enrollment in a managed care plan as a condition of receiving Medicaid coverage. Beneficiaries generally must be given a choice of at least two plans, though states may waive this rule in rural areas under certain circumstances. States may not mandate managed care enrollment for certain, more vulnerable Medicaid beneficiaries. The Senate Budget Bill establishes standards relating to information disclosure, access to care, access to specialists, and access to emergency services. It requires plans to establish grievance procedures, sets a general requirement of timeliness for prior authorization systems, and provides for quality assurance standards. It prohibits balance billing by plan contractors and subcontractors. It establishes standards for financial soundness of Medicaid managed care plans, and authorizes the Secretary to apply new sanctions against plans that do not comply with the Senate Budget Bill’s requirements.
Status: Passed by the Senate on June 26, 1997, and awaiting action by reconciliation conference committee.
S. 644–D’Amato/H.R. 1415–Norwood
This bill establishes consumer protection standards for managed care plans, both insured and self-insured. Standards address information disclosure, gag rules, grievance procedures, utilization review, quality assurance, access to care, access to specialists, emergency services, continuity of care, privacy, experimental therapies, provider protection, discrimination, minimum solvency, and enforcement issues. The bill requires plans to disclose specified information to enrollees, prospective enrollees, health professionals, and providers. Time limits and restrictions on reviewer qualifications are established for internal review of grievances and appeals; time limits are also specified for UR prior authorization determinations. The bill mandates internal quality improvement programs with specified components. Enrollees must have access to specialized treatment when necessary, and must receive continued coverage when provider changes could disrupt continuity of care. Plans must offer point-of-service options with fair and reasonable premiums. Emergency services must be covered and must be accessible at all times. States may impose more stringent requirements than those specified in the bill.
Status: Hearings were held in the Committee on Labor and Human Resources in May 1997. No committee or legislative actions have been taken; provisions similar to portions of this bill have been incorporated into the House and Senate Budget Bills. The House companion bill to S. 644 is H.R. 1415 (Norwood).
S. 373–Kennedy/ H.R. 820–Dingell
This bill sets forth consumer protection standards for managed care plans, both insured and self-insured. Standards address information disclosure, gag rules, grievance procedures, utilization review, quality assurance, access to care, access to specialists, emergency services, continuity of care, privacy, experimental therapies, provider protection, and enforcement issues. The bill requires plans to disclose specified information, updated monthly, to state authorities, enrollees, and the public. The bill also outlines a grievance/appeals system with internal and external mechanisms, including time limits and reviewer requirements for all grievances/appeals. Time frames are also established for UR prior authorization determinations. Minimum requirements for internal quality assurance are established, including a minimum uniform data set to be specified by the Secretary. The bill requires plans to cover treatment by specialists, and requires continuity of care for specified periods after providers are no longer participating. If emergency services are covered benefits, standards are set forth for coverage without prior authorization and without regard to whether the provider is participating. To assist consumers with coverage choice, filing complaints, and to investigate instances of poor treatment of enrollees, the bill requires the establishment of state health insurance Ombudsmen. States are permitted to impose more stringent requirements on plans than those outlined in the bill.
Status: Hearings on the subject of health care quality in commercial and public plans have been held by the Senate Labor and Human Resources Committee and the Senate Finance committee. No hearings have yet been held on this particular bill, nor has committee or legislative action been taken. A similar bill to S. 373 has been introduced in the House, H.R. 820 (Dingell). Unlike S. 373, H.R. 820 does not amend ERISA.
S. 346–Wellstone
This bill sets forth consumer protection standards for managed care plans, both insured and self-insured. Standards address information disclosure, gag rules, grievance procedures, utilization review, access to care, access to specialists, emergency services, privacy, provider protection, discrimination, minimum solvency, and enforcement issues. The bill requires plans to disclose specified information in standardized form to prospective covered individuals and UR information to state officials. The bill also establishes guidelines for internal, external/independent, and expedited reviews of grievances, which are to be further developed through federal regulation. Requirements for mandatory UR programs are described, and additional standards are to be developed for certification of UR programs. The bill sets forth standards for provider credentialing, and requires states to develop uniform credentialing requirements. “Meaningful” access to specialist treatment is required, and enrollees with chronic conditions must receive ongoing direct access to specialists as appropriate. Emergency services must be covered and must be accessible at all times. States are to establish Offices for Consumer Information, Counseling and Assistance with Health Care to educate and assist consumers with health insurance issues. States may pass laws with equal effect or stricter requirements than those in the bill.
Status: Hearings on the subject of health care quality in commercial and public plans have been held by the Senate Labor and Human Resources Committee and the Senate Finance committee. No hearings have yet been held on this particular bill, nor has committee or legislative action been taken.
S. 864–Chafee/Breaux
This bill sets forth protections for Medicaid beneficiaries enrolled in managed care plans. The bill permits states to mandate enrollment in a managed care plan as a condition of receiving Medicaid coverage. Beneficiaries generally must be given a choice of at least two plans, though states may waive this rule in rural areas under certain circumstances. States may not mandate managed care enrollment for certain, more vulnerable Medicaid beneficiaries. The bill establishes standards relating to information disclosure, access to care, access to specialists, and access to emergency services. It establishes specific standards for access to care provided by Ob-Gyns for women and care by specialists for patient with chronic conditions. The bill requires plans to establish grievance procedures, sets a general requirement of timeliness for prior authorization systems, and provides for external review of enrollee grievances and of quality assurance standards. It prohibits balance billing and restrictions on medical communications between providers and patients. It establishes standards for financial soundness of Medicaid managed care plans, and authorizes the Secretary to apply new sanctions against plans that do not comply with the bill’s requirements.
Status: Some portions of this bill appear in the Senate Budget Bill, and others appear in the House Budget Bill.
H.R. 586–Ganske
This bill establishes consumer protection standards in the area of medical communications for group and individual insurers, including group health plans. Standards address gag rules and enforcement issues. Although a similar bill, S. 449 (Kyl/Wyden), is not included as a separate bill in the side-by-side, the description of H.R. 586 highlights the main difference between H.R. 586 and S. 449. Both S. 449 and H.R. 586 prohibit plan restrictions on medical communications and establish monetary penalties for violation of this rule. In addition, H.R. 586 provides that while plans may not restrict such communications, entities operating plans may place limitations on services offered based on religious or moral convictions. S. 449 includes a somewhat different “conscience clause.”
Status: During the 104th Congress, hearings on this bill were held by the Health Subcommittee of the House Committee on Ways and Means. In addition, the Health and Environment Subcommittee of the House Commerce Committee also held a hearing which focused on the issue of gag rules in managed care plans and whether legislation was necessary to address the issue. In July 1996, the full Commerce Committee met in open markup session and ordered the bill reported to the House, as amended, by a voice vote. No further action was taken. During the 105th Congress, portions of this bill have been incorporated within the House Budget Reconciliation Bill. See above.
H.R. 815–Cardin
This bill establishes consumer protection standards in limited areas for group and individual insurers, group health plans, Medicare (HMOs and competitive medical plans), Medicaid, and Medicare Select plans. Standards address emergency services, information disclosure, and enforcement issues. The bill sets forth standards for coverage of emergency services without prior authorization and without regard to whether providers are participating. Time limits are established for authorization of post-stabilization care. States may establish standards relating to emergency services to the extent they do not prevent the application of requirements in the bill.
Status: No legislative or committee action. Similar provisions are incorporated within the House and Senate Budget Bills, as well as within S. 644, S. 373, and S. 346.
H.R.135–DeLauro
This bill establishes consumer protection standards in limited areas for group and individual insurers, including group health plans. Standards address protections relating to covered benefits, provider protection, and discrimination as they relate to treatment of breast cancer. The bill establishes minimum length of stay requirements for mastectomies and lymph node dissections for treatment of breast cancer if these services are covered benefits. In addition, the bill prohibits financial incentives to providers and enrollees for purposes of avoiding these requirements; however, doctors in conjunction with patients may decide upon shorter lengths of stay. States may pass laws requiring at least the same length of stay or requiring that length of stay decisions be left to doctors in consultation with patients.
Status: No legislative or committee action.
S. 795–Jeffords/Lieberman
This bill establishes consumer protection standards for federal health plan contractors, including the Federal Employees Health Benefits Program, Medicare, Medicaid, TRICARE, and Veterans Affairs. Standards developed pursuant to the bill address information disclosure, grievance procedures, quality assurance, and enforcement. The bill requires plans to disclose specified information in standardized form to prospective enrollees. The bill also establishes a Federal Health Plan Quality Council to evaluate plans, direct government participation in regional health care accountability initiatives, and advise the President and Congress on consumer protection and quality of participants’ health care. The Council must establish criteria for mandatory certification of plans by licensed certification entities, with minimum criteria requirements specified in the bill. The Council will pay plans to reward them for meeting or exceeding quality targets; to fund this program, all plans must allocate annual payments to the Council.
Status: Hearings on the subject of health care quality in commercial and public plans have been held by the Senate Labor and Human Resources Committee and the Senate Finance committee. No hearings have yet been held on this particular bill, nor has committee or legislative action been taken.
Side-By-Side Comparison Of Proposed Federal Legislation For Consumer Protection In Managed Care Plans:
Side-By-Side Part One Part Two Part Three Part Four
This report provides information on key budgetary facts and trends and highlights federal spending in health care programs. It includes an overview of federal revenues and spending in fiscal year 1995, an overview of the budget “window” from fiscal year1996 through fiscal year 2002, and the historical context for the budget debate, from fiscal 1973 through fiscal year 2002.
Understanding the Growth in Medicare’s Home Health Expenditures
Overview Of Selected Medicare Provisions:
A Side-by-Side Comparison of Medicare Current Law with House and Senate Provisions to the Balanced Budget Act of 1997
Prepared by: Health Policy Alternatives, Inc.
Prepared for: The Henry J. Kaiser Family Foundation
July 1997
This report, prepared by Health Policy Alternatives, presents a side-by-side comparison of current Medicare law with selected Medicare provisions included in the Balanced Budget Act of 1997, as passed by the House of Representatives and the Senate.
The report includes a description of selected Medicare provisions in:
In addition, the report includes Congressional Budget Office estimates of the described provisions.
Because this document is intended to highlight proposed changes that are likely to have a direct impact on beneficiaries, it does not include provisions pertaining to payments and other policies affecting health plans that contract with Medicare or providers under the traditional Medicare program. Table Of Contents
Preface ii A. Medicare Plus/Medicare Choice Plans 1 1. Private plan options 1 2. General enrollment provisions 2 3. Special enrollment period 2 4. MSA enrollment 2 5. Disenrollment 3 6. Minimum enrollment 3 7. 50/50 rule 3 8. Premiums for basic benefits 4 9. Required additional benefits, etc. 4 10. Cost-sharing 5 11. Supplemental benefits (extra benefits not covered under the traditional Medicare program) 5 12. Balance billing by providers 6 13. Quality assurance 6 14. Access to emergency services 7 15. Minimum payments to out-of-plan providers 8 16. Provider-patient communications 8 17. Physician incentive plans 9 18. Marketing materials 9 19. Beneficiary counseling 9 20. Consumer information 10 21. Grievance and appeals 10 B. Establishment Of New Medicare Commission 11 1. Advisory commission on the future of Medicare 11 C. Medigap 12 1. Guarantee issue 12 2. Use of pre-existing condition exclusions 12 3. New Medigap policy 12 D. New Benefits 13 1. Preventive benefits 13 E. Co-Insurance And Other Out-Of-Pocket Costs 14 1. Home health copayments 14 2. Allowing beneficiaries to waive Medicare limits on provider charges 14 3. Hospital outpatient co-insurance 15 F. Part B Premium 16 1. Part B premium 16 2. Income-related Part B premium 16 G. Low-Income Protection 17 1. Low-income premium assistance 17 2. Low-income cost-sharing assistance 17 H. Eligibility 18 1. Delay Age of Entitlement 18
Balanced Budget Act Of 1997
Comparison Of Current Law With Selected House And Senate Medicare Provisions
A. MedicarePlus/Medicare Choice Plans Provision Current law House / h.r. 2015 Senate / s. 947 1. Private plan options Beneficiaries can choose coverage under a risk or cost contract HMO or remain in the traditional Medicare program. Beneficiaries can choose from an array of private plans including HMOs, PPOs, PSOs, plans offered by religious fraternal benefit societies, and MSAs (in combination with high-deductible plans) under a risk contract with Medicare. All options are required to meet revised quality and consumer protection standards.
CBO estimate1 98-02 98-07 Payment reforms:2 -$18.6 b -$75.1 b Selection effects: +$3.4 b n/a Similar provision except that beneficiaries may also choose coverage in an unrestricted fee-for- service (FFS) plan, or any other approved private plan with a Medicare contract. FFS plans would be exempt from most quality and consumer protection standards, including balanced billing limits.
CBO estimate 98-02 98-07 Payment reforms: -$26.5 b -$150.7 b Selection effects: +$0.9 b n/a 2. General enrollment provisions Beneficiaries may enroll in a risk or cost contract HMO at any time during the year that the plan is open for enrollment. Risk or cost contract HMOs must be open for enrollment at least for 30 days during each year. From 1998-2000, all plans are required to have continuous open enrollment. Coordinated enrollment periods would be held during which changes among plans may be made for the following year beginning in October, 2000 (and in every succeeding year). Prior to coordinated open enrollment periods, comparative consumer data would be provided at “health fairs” sponsored by the HHS. Similar provision except individuals could enroll any time plans were open for enrollment including the coordinated enrollment period (beginning in November, 1998 and each year thereafter). 3. Special enrollment period No provision. In 2001 (and after), special enrollment periods would be held if a plan terminates operations in an area, an individual moves from plan service area, or a beneficiary disenrolls from a plan for cause. Similar provision except that special enrollment periods would begin in 1998 (and thereafter). 4. MSA Enrollment No provision. MSA enrollment permitted only at time of entitlement or annual open enrollment periods beginning for MSAs only in 1998. Enrollment in MSAs would be limited to 500,000 beneficiaries. Similar provision except that enrollment in MSAs would be limited to 100,000 beneficiaries. 5. Disenrollment Beneficiaries may disenroll at any time from an HMO. Disenrollments are effective within 30 days of notice. Beneficiaries permitted to disenroll at any time before 2001 as under current law (except disenrollment from MSA plans permitted onlyduring annual open enrollment periods.) In 2001, disenrollment is permitted only during the first 6 months of the year and during the annual open enrollment period. In 2002 and thereafter disenrollment permitted only during the first 3 months of year and during open enrollment period. Beneficiaries permitted to disenroll at any time as under current law, except for MSA plans, for which disenrollment is limited to annual open-enrollment periods. 6. Minimum enrollment Risk or cost contract HMOs must have at least 5000 enrollees (or 1500 in rural areas). Plans required to have at least 5000 (or 1500 for PSOs) enrollees or fewer under exceptions approved by HHS for rural areas (but not less than 500 for PSOs.) Requirements may be waived in first 3 years of Medicare contract. Plans required to have at least 1500 enrollees (500 in rural areas). PSOs permitted to count individuals served under risk arrangements with other plans to meet minimum enrollment standard. Requirement may be waived for first 2 years of Medicare contract. 7. 50/50 Rule Risk or cost contract HMOs are prohibited from having more than 50% of their enrollees eligible for Medicare or Medicaid. The 50/50 Rule would not apply to MedicarePlus plans. HHS provided authority to waive 50/50 rule after 1996 for current risk contract HMOs. The 50/50 rule sunsets after 1/1/99 and HHS provided authority to waive the rule prior to sunset. 8. Premiums for basic benefits Risk contract HMOs must provide at least the benefit package covered by traditional Medicare (“basic benefits”). They may not charge beneficiaries a premium for these benefits, except to cover cost-sharing equivalent to that in the traditional program. Similar to current law except that prohibition on additional premium for basic benefits would not apply to MSA plans. (For rules on minimum payments to out-of-plan providers, see below.) Similar provision except that prohibition on additional premium for basic benefits would not apply to either “unrestricted fee-for-service” plans3 or MSA plans. (For rules on minimum payments to out-of-plan providers, see below.) 9. Required additional benefits, etc. If the average of capitated payments a HMO receives from Medicare exceeds its adjusted community rate (ACR) for “basic benefits”, additional benefits equal to the excess paid by the program must be offered, the excess deposited in a benefit stabilization fund, or returned to Medicare.4 Cash rebates are not permitted. Current law is retained except that MSAs would not be required to compute an ACR or to provide additional benefits. Cash rebates would not be permitted as under current law. Identical provision. 10. Cost-sharing Average cost-sharing for “basic benefits” in an HMO cannot exceed the actuarial value of deductibles and coinsurance in the traditional, fee-for service program. Current law is retained except that MSA plans would not be subject to any limit on cost-sharing. Similar provision with an exception for “unrestricted fee-for-service” plans. MSA plans required to limit annual cost-sharing for Medicare covered services to $3000 for individuals, $5500 for couples. 11. Supplemental benefits (extra benefits not covered under the traditional Medicare program) HMOs may offer benefits in addition to those covered under the traditional Medicare program. HHS must review these benefits (for cost as barrier to enrollment) before plan can require beneficiary to pay for them as condition of enrollment. Supplemental benefits that are optional for beneficiaries are not subject to such review. Premium for supplemental benefits may not exceed ACR for services involved. Current law retained except that ACR limit on premiums would not apply to MSA plans. Similar provision with an exception to ACR limit on premiums for “unrestricted fee-for-service” plans as well as MSA plans. 12. Balance billing by providers HMOs must require participating providers not to balance bill Medicare enrollees. Out-of-plan hospitals, nursing homes may not charge more for Medicare covered inpatient services than the amount traditional Medicare would pay. Out-of-plan physicians may not charge beneficiary more than they could in the traditional program. Similar to current law, except that the Ways & Means bill would not apply balance billing limits to services furnished by physicians and other entities to enrollees in MSA plans. Similar to Ways & Means bill except that balance billing limits would not apply to services furnished by physicians and other entities to enrollees in either an “unrestricted fee-for-service” plan or an MSA plan. 13. Quality Assurance Plans are required to have ongoing internal quality assurance programs that stress health outcomes. External review by a peer review organization (PRO) of care is required. HHS has authority to designate an alternative entity to perform quality reviews. Ongoing internal quality assurance programs are required to measure outcomes, provide for utilization review, disclose data to facilitate choice, and conduct consumer satisfaction surveys. Plans must have contract with independent review agency that can be satisfied through approved private accrediting entities. Similar provision except that provisions do not apply to unrestricted FFS plans. Requires all plans to disclose loss ratios. 14. Access to emergency services HMOs are required to provide access to emergency services 24 hours a day, 7 days a week and to pay for out-of-plan emergency services without regard to prior authorization.
Defines emergency services as services that are needed immediately because of an injury or sudden illness and cannot be delayed for the time needed to reach plan providers without risk of permanent damage to health. Plans would be required to coverout-of-plan emergency services without regard to prior authorization or the provider’s contractual relationship with the plan.
Emergency services are services needed to evaluate or stabilize an emergency medical condition. An emergency medical condition is a medical condition manifesting itself by acute symptoms of sufficient severity such that a prudent layperson, who possesses an average knowledge of health and medicine, could reasonably expect the absence of immediate medical attention to result in specified serious adverse health effects. Similar provision except the definition of emergency medical condition would be expanded to include severe pain. 15. Minimum payments to out-of-plan providers No provision. To satisfy requirement that MedicarePlus plans provide at least the “basic benefits” under Medicare, out-of-plan providers must be paid at least amounts equal to traditional Medicare(plus allowable balance billing). MSAs must also make minimum payments (excluding balance billing) and count toward the deductible at least the amount traditional Medicare would pay. “Unrestricted fee-for-service” plans would not be required to meet standards for minimum payments to providers. 16. Provider-patient communications No provision. MedicarePlus plans could not prohibit or otherwise restrict communications between a health professional and a patient about the patient’s health status or treatment options if the health professional is acting within their scope of practice. No provision. 17. Physician incentive plans HMOs may not operate a physician incentive plan that links incentive payments (compensation) to specific patients. A physician incentive plan that places physicians at substantial financial risk must include stop-loss protection and periodic surveys on access. Similar to current law except Commerce bill would expand prohibition to cover incentive plans involving other health professionals. Would retain current law. 18. Marketing materials Risk contract HMOs must submit marketing materials to HHS for review and approval prior to use. MedicarePlus plans required to submit marketing materials to HHS 45 days prior to use. Unless disapproved, materials may be used. No MedicarePlus plan or agent is permitted to complete any election form for a beneficiary. Similar provision except MedicarePlus plans or agents are not prohibited from completing a beneficiary election form. 19. Beneficiary counseling HHS is authorized to make grants to states to support beneficiary insurance information and counseling services. HHS is authorized to require MedicarePlus plans to pay their pro rata share of the costs of information dissemination and to support the grant program established under current law for counseling services. Similar provision except that MedicarePlus plans are not required to share in the costs of the grant program for state counseling services authorized under current law. 20. Consumer information HHS is authorized to prescribe the requirements for risk contracting HMOs regarding information about qualified plans for beneficiaries. Brochures, enrollment forms and other promotional information must be approved by HHS prior to use. MedicarePlus plans are required to disclose at time of enrollment and annually the following information in a standardized format: plan service area; benefits and exclusions; provider network members; out-of-area coverage policy; premiums; prior authorization rules; grievance and appeal rights; and quality assurance programs. Similar provisions except that on request from a beneficiary, Medicare Choice plans must furnish data on their plan compared to the traditional Medicare program. 21. Grievance and appeals Risk or cost contract HMOs must have meaningful grievance and appeals procedures. In cases of denied services or disputes over charges, beneficiaries have the right to a hearing by HHS if the amount is over $100 (or judicial review if the amount is over $1000. Beneficiaries must be informed of their rights at the time of enrollment and annually thereafter. Similar to current law, MedicarePlus plans would be required to allow external review by HHS of service denials if amount of service exceeds $100, and to judicial review if amount exceeds $1,000.
In case of urgently needed care, reviews must be completed within 72 hours, or 24 hours for reconsiderations. HHS must contract with private entity for appeals of urgent or emergency care. Similar provision. B. Establishment of New Medicare Commission Provision Current law House / h.r. 2015 Senate / s. 947 1. Advisory commission on future of Medicare No provision. A 15-member bipartisan commission is established composed of members of Congress and Executive Branch officials who are directed to report, by 5/1/99, on the impact of baby boom retirees on Medicare, and to provide recommendations for comprehensive reforms, and on the feasibility of an ongoing independent commission to make annual recommendations on Medicare expenditure targets. Commission sunsets 30 days after submission of its report. Similar provision with specific direction to report on restoring financial solvency to Medicare through 2030, on an appropriate balance of benefits and individual contributions, on financing medical education, on the feasibility of a buy-in to Medicare at age 62, and on the impact of chronic disease and disability trends on the future of Medicare. C. Medigap Provision Current law House / h.r. 2015 Senate / s. 947 1. Guarantee Issue At age 65, beneficiaries have a one time 6-month open enrollment period for all 10 Medigap plans. Provision does not apply to beneficiaries under age 65 who are entitled to Medicare on the basis of disability. Beneficiaries would have an initial 6-month open enrollment period, and additional open enrollment for Medigap plans A,B,C, or F if: there is no break in prior coverage greater than >63 days; employer coverage is lost; there is a change in residence, or within 6 months of a one-time voluntary disenrollment from a MedicarePlus plan.
CBO estimate 98-02 98-07 +$0.2 b +$0.6 b Similar provision except the one-time voluntary disenrollment option permits open enrollment for 1 year to any Medigap policy with comparable or lesser benefits.
Also, extends initial 6 month open enrollment period to disabled beneficiaries.
CBO estimate 98-02 98-07 +$0.5 b +$1.5 b 2. Use of pre-existing condition exclusions Medigap issuers may impose pre-existing condition exclusion limits up to 12 months during the initial open enrollment period. For beneficiaries with at least 6 months of prior continuous coverage at age 65, during the initial open enrollment period, no preexisting condition exclusion may be imposed. Identical provision. 3. Standardization of Medigap policies Current law permits no more than 10 standardized packages of Medigap coverage to be sold. No provision. Expands list of standardized packages to include a combination of one of the existing 10 policies with an annual deductible of $1500. D. New Benefits Provision Current law House / h.r. 2015 Senate / s. 947 1. Preventive Benefits Medicare program provides limited coverage for preventive and screening services. Coverage is generally limited to diagnosis & treatment of an illness or injury. Coverage extended to annual mammograms for women >40, screening pelvic exams, annual prostate exams for men >50, colorectal screening including sigmoidoscopies, diabetes self-management training and certain supplies, & bone mass measurement.
Current outreach efforts on flu and pneumococcal vaccines extended through 2002.
Waives deductible for screening mammography and pap smears.
CBO estimate 98-02 98-07 +$4.6 b +$9.2 b Similar provisions except that screening pelvic exams, prostate exams, and the extension of outreach efforts are not included.
Waives coinsurance for screening mammograms provided in hospital outpatient departments.
CBO estimate 98-02 98-07 +$3.7 b +$7.3 b E. Co-insurance and Other Out-of-Pocket Costs Provision Current law House / h.r. 2015 Senate / s. 947 1. Home health copayments Home health benefits are not subject to deductibles or co-insurance under Part A or Part B. No provision. A $5 per visit copayment would be imposed on each visit covered under Part B (visits in excess of 100 for post- hospital patients and all visits not preceded by a 3-day hospital stay). Total annual amount of co-pays capped at Part A deductible.
CBO estimate 98-02 98-07 +$4.7 b +$10.5 b 2. Private contracting for Medicare-covered services. Providers and practitioners who furnish Medicare- covered services are required to file claims for their Medicare patients and to abide by limits on how much they can charge these patients above the amount Medicare pays. A provider is not required to file a claim for a covered service only if the beneficiary refuses to supply necessary information for privacy reasons. There are no exceptions to the limits on the amount a provider may charge beneficiaries. No provision. Physicians and other practitioners would be permitted to enter into private contracts for the provision of Medicare covered services with a beneficiary if no claim is submitted and if the practitioner otherwise submits no claims to Medicare for any other beneficiary. Such contracts would not be subject to Medicare balance billing limits. 3. Hospital outpatient co-insurance Co-insurance amounts for outpatient services are equal to 20% of the hospital charge without regard to Medicare payment amount.Co-insurance amounts would be limitedd to 20% of national median o charges for the service in 1996 updated yearly & hospitals allowed to reduce co-insurance to 20% of total payment amount.5 Similar provision except base year for setting co-insurance rates is 1997. F. Part B Premium Provision Current law House / h.r. 2015 Senate / s. 947 1. Part B premium Authority to set Part B premium equal to 25% of part B program costs expires after 1998. Sets Part B premium at 25% of part B program costs permanently.
CBO estimate 98-02 98-07 +$12.9 b +$94.1 b Similar provision.
CBO estimate 98-02 98-07 +$12.4 b +$78.1 b 2. Income-related Part B premium All beneficiaries pay the same Part B premium, which covers 25% of part B program costs (remaining 75% of costs are funded by general revenues). An exception applies to low income Medicare beneficiaries (QMBs and SLMBs) who are entitled to receive Medicaid assistance in paying part B premiums. No provision. Individual beneficiaries with annual incomes over $50,000 & couples over $75,000 would pay higher Part B premiums, which phase up to 100% of Part B costs for individuals with over $100,000 annual income ($125,000 for couples). Administered by HHS based on income from most recently available tax records. Future premiums adjusted to reflect over or under payments in prior years, based on data provided by IRS. Revenues from higher part B premiums credited to Part A.
CBO estimate 98-02 98-07 +$3.9 b +$19.6 b G. Low Income Protection Provision Current law House / h.r. 2015 Senate / s. 947 1. Low-income premium assistance Individuals with income below 100% of poverty (QMBs) & those eligible for Medicaid are entitled to have Medicare premiums, deductibles and co-insurance amounts paid by Medicaid. Those with incomes between 100% & 120% of poverty (SLMBs) are eligible to have Medicaid pay their premiums only. Individuals with incomes between 120% & 135% of poverty would be entitled to Medicaid payment of premiums. Those with incomes between 135% & 175% of poverty would be entitled to Medicaid payment of only the portion of the premium related to the transfer of home health benefits to Part B. Premiums for individuals with incomes above 120% of poverty would be fully financed with Federal funds (i.e., no State match).
CBO estimate 98-02 98-07 +$1.1 b +$8.5 b States entitled to a block grant to support premium assistance to those with incomes between 120% & 150% of poverty. States have flexibility to design assistance within income limits and are not required to apply for grants. Grants sunset after 2002. Grant funds transferred from Part B trust fund total $1.5 billion over 5 years.
CBO estimate 98-02 98-07 +$1.5 b +$1.5 b 2. Low-income cost-sharing assistance Individuals eligible for Medicaid or with annual incomes below 100% of poverty are entitled to have Medicaid pay their Medicare premiums, deductibles, and co-insurance. States are required to pay the full amounts for which individuals would otherwise be liable. No provision. Medicaid would not be required to pay co-insurance amounts for dual eligibles or QMBs to the extent that the Medicare payment exceeds what Medicaid would pay for the same service. Providers would not be permitted to bill for amounts not recovered from Medicaid and beneficiaries would not be financially liable for any payment.
CBO estimate 98-02 98-07 Medicare +$2.9 b +$7.3 b Medicaid -$5.0 b -$12.6 b H. Eligibility Provision Current law House / h.r. 2015 Senate / s. 947 1. Delay Age of Entitlement Individuals generally become entitled to Medicare at age 65. Individuals under age 65 who qualify for Social Security disability benefits become entitled to Medicare after a 24-month waiting period. No provision. Age of entitlement to Medicare would be increased gradually two months/year) to age 67 by 2027.
CBO estimate 98-02 98-07 $0.0 b -$10.2 b
1. CBO estimates of the federal budgetary effects of H.R. 2015 as passed by the House of Representatives on June 25, 1997 and S.947 as passed by the Senate on June 26, 1997. House estimates are based on provisions as reported by the Ways and Means Committee.
2. Savings estimates include impact of payment reforms which are not described in this document.
3. The bill defines an “unrestricted fee-for-service plan” as one that “provides for coverage without restrictions relating to utilization and without regard to whether the provider has a contract or other arrangement” with the plan.
4. The ACR is essentially a proxy for what a plan would charge beneficiaries for the Medicare benefit package if they were enrolled in a community-rated commercial product.
5. Scoring of coinsurance protections are incorporated in the CBO savings estimate of implementing a prospective payment system for hospital outpatient department services.
Heavy Use Of Home Health Services By Sickest And Poorest Seniors Drives Sharply Rising Medicare Home Health Costs
For-profit Agencies Increased Medicare Home Health Expenditures by More Than $1 Billion in 1994
Embargoed for release until: 9 am, EST, Tuesday, July 1, 1997
Washington, D.C. — As Congress looks to the Medicare home health benefit as a possible source ofsavings for the program, a new study prepared for the Kaiser Family Foundation by the Project HOPECenter for Health Affairs finds that the sickest Medicare beneficiaries–those who receive more than200 home health visits per year–have driven the recent expenditure increases in home health spending. These “high utilizers,” most of whom live at or near the poverty level, have more than doubled as ashare of total Medicare home health spending, increasing from 20% in 1991 to 43% of spending in1994, although they accounted for just 10% of home health users (Figure 1).
At the same time, the report finds that for-profit home health agencies generate higher Medicarespending–$1 billion in 1994–because they provide more visits to similar patients than non-profitagencies do.
“Sharply rising costs make the Medicare home health benefit a natural target for budget cutting,” saysDrew Altman, President of Kaiser Family Foundation. “But this study shows that the home healthservices also meet real needs of very sick and low-income seniors. Curtailing services withoutendangering needed care will be a real challenge.”
High Utilizers
Compared to the average beneficiary who received home health services in 1994, those with 200 ormore visits per year were much more likely to have had serious medical problems, with one-quarterhaving two or more hospital admissions within a year. They also had greater long-term care needs,with nearly 80% reporting severe functional impairments, such as difficulty bathing.
The study’s authors also point out that the majority (80%) of people who receive extensive home healthcare live close to or below the poverty level. They observe that adding a copayment for home healthservices for Medicare beneficiaries–part of the Senate bill that was passed last week–woulddisproportionately impact the near-poor who do not qualify for Medicaid but are unable to afford aprivate supplemental policy.
“While home health care was originally conceived as a short-term benefit to help seniors recover after ahospital stay, now only one-third of all home health patients receive this type of ‘post-acute’ care,”points out lead author Joel Leon, of the Project HOPE Center for Health Affairs (Figure 3).
“Medicare’s home health benefit has evolved into a limited long-term care safety net, especially for’high utilizers,'” explains Tricia Neuman, director of the Kaiser Medicare Policy Project and a co-author of the report. “It has also become an important source of medical care for really sick seniorswho are in and out of hospitals several times a year.”
For-Profit Agencies
The report also finds a significant difference in the number of home health visits provided by for-profitagencies as compared to non-profit or government-run agencies. The average annual Medicare homehealth expenditure per beneficiary ($4,442 in 1994) was $1,064 higher for beneficiaries served by for-profit providers. The higher expenditures associated with care from for-profit agencies–which totaled$1 billion in 1994–could not be explained by the age, health, functional status, or other characteristicsof the patients they served.
“The differences in the level of care provided by home health agencies warrant a closer look,” saysLeon.
Medicare’s Home Health Benefit was originally designed to provide short-term care at home tohelp beneficiaries recover following an inpatient hospital stay. Legislative, administrative, and judicialreforms in the 1980s caused an increase in the number of people receiving home health services and theaverage number of visits per home health user. Home health services are funded primarily out ofMedicare’s Hospital Insurance (Part A) Trust Fund, which is financed mainly through payroll taxes. There are no copayments imposed on home health visits. Home health agencies are paid on a cost-reimbursement basis, which is subject to limits.
The home health benefit accounts for 9% of total Medicare spending, nearly $19 billion, in 1997. Between 1991 and 1996, home health spending per enrollee grew at an average annual rate of nearly29%, four times the rate of inpatient hospital and physician care.
SOURCE: Medicare Chart Book, The Kaiser Medicare Policy Project, June 1997.
Understanding the Growth in Medicare’s Home Health Expenditures was prepared by Joel Leon,Ph.D., and Stephen Parente, Ph.D., of Project HOPE Center for Health Affairs, and Tricia Neuman,Sc.D, of the Kaiser Family Foundation. The analysis was based upon data from the Medicare CurrentBeneficiary Survey and related Medicare home health claims. Copies of the report can be ordered bycalling the Foundation’s toll-free request line at 1-800/656-4KFF. Ask for report #1274.
The Kaiser Family Foundation, based in Menlo Park, California, is a non-profit, independent nationalhealth care philanthropy and is not associated with Kaiser Permanente or Kaiser Industries. TheFoundation’s work is focused on four main areas: health policy, reproductive health, AIDS/HIV, andhealth and development in South Africa. The Kasier Medicare Policy Project was established in 1995to provide a framework for the Foundation’s ongoing work related to health coverage for the elderlyand disabled.
Children’s Health Insurance: 1997 Budget Reconciliation Provisions
(as of 07/14/1997)
Center of Health Policy Research and The George Washington University Medical Center
Current Law And StatusHouse BillSenate BillI.Status Recommendations transmitted 06/12/97 from Commerce Committee to Budget Committee. H.R. 2015 passed House 06/25/97. Recommendations transmitted 06/19/97 from Finance Cte to Budget Cte. H.R. 2015 (spending bill) and H.R. 2014 (tax bill) as passed by the Senate 06/25/97 and 06/27/97. II.General Approach No systematic approach to financing health coverage for children. Coverage is through employer-sponsored private insurance, publicly-subsidized private plans, and Medicaid.
In 1994 among children under age 18:
The percentage of uninsured children varied by income, with no coverage among:
Most uninsured children live in working families with incomes <250% FPL.
One third of uninsured children are eligible for Medicaid but not enrolled. Children’s Health Insurance
Child Health Assistance Program (CHAP) creates an entitlement in states, but not in individuals.
Entitles states to payments ($14 billion over five years) to cover uninsured, low income children using any or all of the following methods:
Requires states to submit to HHS a plan describing use of funds, with approval of the plan triggering state eligibility for payments.
Requires state plans to follow federal framework on eligibility, benefits, cost-sharing, and other matters.
Effective October 1, 1997.
Number of children covered under CHAP = 500,000 previously uninsured children (CBO estimate).
Medicaid
Permits states to speed up the current mandatory phase-in of Medicaid coverage for children born after September 30, 1983 who are under age 19 and whose family income is below 100% FPL. Children covered = 125,000 (CBO estimate).
Allows states the option to provide 1 year of continuous coverage under Medicaid for children under 19 ($0.7 billion over five years). Children covered = 130,000 (CBO estimate).
Permits states to provide Medicaid during a presumptive eligibility period for children under 19 years old ($0.5 billion over five years). Children covered = 110,000 (CBO estimate).
Total number of children covered = 865,000 previously uninsured children (CBO estimate). Children’s Health Insurance
Children’s Health Insurance Initiatives creates an entitlement in states, but not in individuals.
Entitles states to payments ($16-$24 billion over five years) to cover uninsured, low income children using one of two methods:
Requires states to carry out outreach activities to enroll children who are eligible for Medicaid and to encourage employers to provide health insurance coverage for children.
Requires states to submit to HHS a program outline identifying which one of the two options the state intends to use.
Effective October 1, 1997.
Medicaid
To qualify for new funds, states must speed up (by 2000) the current mandatory phasing-in of Medicaid coverage for children born after September 30, 1983 who have not reached the age of 19 and whose family income is below 100% FPL.
Allows states the option to provide 1 year of continuous coverage under Medicaid for children under age 19.
Total number of children covered = 1,670,000 previously uninsured children (CBO estimate). III.Coverage Rules Eligibility and coverage rules vary with type of plan (e.g., employer-based plan, Medicaid, state insurance program).
States have an option to extend Medicaid to all uninsured children. Five states cover children under age 18 or 19 in near-poor families with incomes up to 185% FPL or higher. Defines low income children as children who are under 19 years old and whose family income is below 300% FPL.
Further defines targeted low-income children as those who:
Prohibits discrimination on the basis of diagnosis or denial of eligibility on the basis of a preexisting medical condition, although group health plans may continue to exclude coverage of preexisting conditions as under current law.
Permits states to establish coverage standards based on age, income, resources, disability status, duration of eligibility and geographic area. Within each category, states must give priority to children with lower family incomes.
Requires state plans to include a description of:
Defines low income children as children who are under 19 years old and whose family income is below 200% FPL.
Permits states to establish coverage standards with priority to children with lower family incomes.
Requires program outlines to include a description of
IV.Premium Assistance Requires that, to the extent possible, states set individual premiums on a income-based, sliding scale, giving priority to children in lower income families.
Any state payments (in the form of cash or vouchers) would not be counted as income for purposes of determining eligibility for any means-tested federal or federally-assisted program (e.g., food stamps). Permits states to impose premiums on families with incomes above 150% FPL.
Imposes same limits on beneficiary costs as Medicaid for those below 150% FPL (i.e., no cost-sharing for mandated populations, but nominal cost-sharing for optional populations). V.Benefit Structure Medicaid’s EPSDT program covers comprehensive benefits for children, including: medical, dental, preventive, primary, hospital, specialty, developmental, and long term care services.
Employer plans vary in scope of benefits, with most including preventive, primary, and inpatient services and few covering developmental or long term care services.
Special state programs and private insurance plans for children vary in scope of benefits; most have preventive and primary care, but many do not include inpatient or long term care services. Requires states to cover at least four categories of services:
Requires states to specify:
Group plans are exempt from covering the minimum categories of benefits if they provide the same coverage to children eligible for assistance as provided to other individuals covered by the group plan.
Prohibits states from using funds to pay for abortions or to assist in the purchase of benefits that include coverage of abortion except in cases of rape, incest, or danger to the mother. Requires states using the grant program to provide benefits at least equivalent to the Blue Cross/Blue Shield standard PPO option under Federal Employee Health Benefit Plan (FEHBP), including dental, vision and hearing. The Secretary of HHS will certify that plans are equivalent or better than this standard FEHBP benefit package.
Requires parity in mental health coverage if insurers offer such coverage.
Prohibits states from using funds to pay for abortions or to assist in the purchase of benefits that include coverage of abortion except in cases of rape, incest, or danger to the mother. VI.Cost-Sharing Prohibits states from imposing cost-sharing on preventive services. Permits states to impose cost-sharing requirements on families with incomes above 150% FPL. Imposes same limits on beneficiary costs as Medicaid for those below 150% FPL. VII.Insurance Reforms Prohibits states from permitting the use of any preexisting condition exclusion for covered benefits.
Group plans are exempt from preexisting conditions requirements so long as they are in compliance with the Health Insurance Portability and Accountability Act (HIPAA) of 1996. Not specified. VIII.Treatment of Medicaid Medicaid coverage mandated for:
Optional groups:
No cost-sharing for children’s services.
States have an option to extend Medicaid to all uninsured children. Five states cover children under age 18 or 19 in near-poor families with incomes up to 185% FPL or higher. Phase-In Of Poor Children
Permits states to speed up the current mandatory phase-in of Medicaid coverage for children born after September 30, 1983 who have reached age 6 and whose family income is below 100% FPL. (Under the current mandatory phase-in schedule, all poor children under 19 will be eligible for Medicaid by the year 2002).
Eligibility
Permits states to use new funds available under the child health assistance program with an enhanced federal match to expand Medicaid eligibility under the following conditions:
Outreach And Enrollment
Requires state plans to describe:
Continuous Coverage
Permits states to provide 12-month continuous coverage under Medicaid for children under 19.
Presumptive Eligibility
Permits states to provide Medicaid during a presumptive eligibility period for children under 19 years old; coverage financed through the state allotment for the child health assistance program.
Reductions In Federal Grant
Reduces federal grants to states based on costs related to presumptive eligibility. Phase-In Of Poor Children
To qualify for new funds, states must complete the phase-in of Medicaid to provide coverage for all children under age 19 whose family income is below 100% FPL by 2000. The phase-in can be staggered: under 17 by 1998 and under 19 by 2000.
Eligibility
Permits states to use new funds available under the child health assistance program to expand Medicaid with an enhanced federal match for children in eligibility expansion group.
Outreach And Enrollment
Funds set aside for states to carry out outreach activities, including:
Requires states to coordinate coverage with other programs (e.g., Medicaid).
Continuous Coverage
Permits states to provide 12-month continuous Medicaid coverage for children under age 19 for 1 year after eligibility is determined (option would trigger coverage of other Medicaid-eligible populations).
Maintenance Of Medicaid Effort
Requires state maintenance-of-effort according to which states must maintain:
Reductions In Federal Grant
Reduces federal grants to states based on costs related to three aspects of Medicaid expansion:
IX.Treatment of Employer-Based Coverage Permits states to deny benefits under the child health assistance program if other private coverage is available.
Exempts group plans from covering the minimum categories of benefits if they provide the same coverage to children eligible for assistance as provided to other individuals covered by the group plan. Permits group plans to impose preexisting condition exclusions so long as they are in compliance with HIPAA.
Requires HHS to establish rules for payment of family coverage under group plans. Permits payment if state demonstrates that purchase of that coverage is cost effective relative to the purchase of comparable coverage limited to targeted low income children. Provides FEHBP-equivalent coverage.
Requires states to avoid substitution of private coverage by the new assistance provided by the state. X.Children with Special Health Care Needs Requires states to ensure access to specialty care, including the use of a specialist as a primary care provider, for eligible children who have a chronic condition, a life-threatening condition, or a combination of conditions warranting such care. Provides for financial parity of mental health coverage if insurers offer such coverage. XI.State Role in Program Administration Multiple approaches to financing children’s health insurance.
States administer Medicaid. In general states determine the eligibility process, payment levels, providers, etc. State Medicaid programs use options and waivers to further modify program eligibility categories, benefits, payments, and provider types.
Over 30 states operate child health insurance initiatives including premium subsidy programs, insurance pools, and Medicaid optional expansions. States may choose to cover uninsured, low income children using any or all of the following methods:
Requires states to prepare a plan in compliance with federal requirements and to submit it to HHS for approval.
Gives states the flexibility to design a child health assistance program within broad federal guidelines.
Requires states to set up a process to involve the public in the design and implementation of the plan as well as to ensure ongoing public involvement.
Mandates state spending to match federal allocation.
Requires states to collect data, maintain records and furnish reports to HHS for monitoring of administration and compliance as well as evaluation and comparison of state plan effectiveness.
Requires states to submit an evaluation to HHS by March 31, 2000 that would include:
Denies payments to states in the following cases:
States may choose to cover uninsured, low income children using one of two methods:
Requires states to prepare a program outline in compliance with federal requirements and to submit it to HHS for approval.
Gives states the flexibility to design a grant program within broad federal guidelines.
Mandates state spending to match federal allocation.
Requires states to submit annual progress reports to HHS.
Denies payments to states in the following cases:
Requires maintenance-of-effort according to which states must maintain
XII.Allocation and Distribution of Funds to States Federal-state entitlement funding for Medicaid, in which a set federal contribution is made to states for each dollar spent – known as federal matching (FMAP).
Employers have tax deduction for contributing to employee health benefits. Typically, employees make a contribution to health benefit costs. Some employers “self-insure” under ERISA, (i.e. they assume the risk associated with health insurance rather than buying coverage from an insurance company). Federal Matching
For expanded coverage of children through Medicaid the Enhanced FMAP = FMAP + [30% x (100-FMAP)].
For expanded coverage of children through grant program, provides for quarterly payments by HHS not to exceed 80% of state expenditures.
Allocation Of Funds
Entitles each state to receive a yearly minimum allotment of $2 million (each territory: $100,000).
Ratio for allotments = (Number of uncovered low income children for a fiscal year in the state1 x State cost factor2)/(Sum of the products in numerator)
Reduces the allotment of states opting for the increased Medicaid matching option by the amount of additional payment made under Medicaid that is attributable to the increase in the federal medical assistance percentage.
Authorized Expenditures
Permits payments for:
Caps payments for health services initiatives to improve the health of children, outreach activities, and other reasonable costs incurred to administer the program at 15% of total program expenditures.
Gives states three years to expend the money under the child health assistance program.
Reductions In Federal Grant
Reduces federal grants to states based on costs related to presumptive eligibility. Federal Matching
Defines bonus amount as:
Allocation Of Funds
Entitles states to receive a base allotment.
Allotment percentage = (Number of low-income children in the base period in the state3)/(Total number of low income children in the base period in all states)
Creates two financing pools:
Permits HHS to adjust the 85/15 split annually.
Authorized Expenditures
Permits payments for:
Prohibits use of funds for:
Gives states three years to expend the money.
Reductions In Federal Grant
Reduces federal grants to states based on costs related to three aspects of Medicaid expansion:
XIII.Estimated Cost $16 billion over 5 years:
$16-$24 billion over 5 years for children’s health insurance initiatives, with $8 billion through 20 cents/pack increase in the cigarette tax. 1 Defined as the arithmetic average of the number of low income children (i.e., children whose family income is below 300% FPL) with no health insurance coverage as reported in the three most recent March supplements to the Current Population Survey before the beginning of the fiscal year.
2 Defined as (.15) + [(.85) x (annual average wages per employee for the state for a fiscal year/annual average wages per employee for the 50 states and D.C.)].
3 Defined as the average number of low income children in the state between 10/01/92 and 09/30/95 as reported in the March 1994, 1995, and 1996 supplements to the Current Population Survey.
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