Senate Bill No. 250
(By Senator Blatnik)
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[Introduced March 1, 1993; referred to the Committee
on Health and Human Resources; and then to the
Committee on Finance.]
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A BILL to amend and reenact section three, article seventeen,
chapter eleven of the code of West Virginia, one thousand
nine hundred thirty-one, as amended; and to amend chapter
sixteen of said code by adding thereto a new article,
designated article two-i, all relating to health care for
children; placing a surcharge on the distribution of
cigarettes and other tobacco products to provide a fund to
pay for health care for all children of this state; setting
forth legislative intent; providing a short title; defining
certain terms; establishing criteria for distribution of
moneys from the fund; establishing a management team;
providing eligibility criteria for participation; phasing in
eligibility for certain children over twelve years of age;
providing for free insurance and subsidized insurance;
prescribing duties and responsibilities for the insurance
commissioner, the governor's cabinet on children and youth;
establishing a children's health advisory council;
establishing grant criteria; providing that the insurance
commissioner enter into certain provider contracts;
requiring providers to provide specified types of health
care for children; allowing a waiver in certain instances;
providing for insurance rate filing and review; requiring
outreach services; and providing that grantees will be the
provider of last resort for health care for children.
Be it enacted by the Legislature of West Virginia:
That section three, article seventeen, chapter eleven of the
code of West Virginia, one thousand nine hundred thirty-one, as
amended, be amended and reenacted; and that chapter sixteen of
said code be amended by adding thereto a new article, designated
article two-i, all to read as follows:
CHAPTER 11. TAXATION.
ARTICLE 17. CIGARETTE TAX ACT.
§11-17-3. Levy of tax; ratio.
For the purpose of providing revenue for the general revenue
fund of the state, an excise tax is hereby levied and imposed on
sales of cigarettes at the rate of seventeen cents on each twenty
cigarettes or in like ratio on any part thereof. Only one sale
of the same article shall be used in computing the amount of tax
due hereunder.
Effective the first day of July, one thousand nine hundred
ninety-three, a surcharge tax of one fourth of one cent shall be
placed on the distribution within this state of each cigarette
and, at the same rate as calculated by the tax commissioner, on
the distribution within this state of all other tobacco productswhich include, but are not limited to, all forms of cigars,
smoking tobacco, chewing tobacco, snuff and other articles or
products made of, or containing at least fifty percent tobacco.
The tax commissioner shall collect the tax annually and pay
the moneys collected into a special fund in the state treasury to
be known as the children's health care fund. Moneys in the
children's health care fund shall be expended as provided in
article two-i, chapter sixteen of this code.
CHAPTER 16. PUBLIC HEALTH.
ARTICLE 2I. CHILDREN'S HEALTH CARE.
§16-2I-1. Short title.
This article shall be known and may be cited as the
"Children's Health Care Act."
§16-2I-2. Legislative findings and intent.
The Legislature finds and declares as follows:
(1) All citizens of this state should have access to
affordable and reasonably priced health care and to
nondiscriminatory treatment by health insurers and providers.
(2) The uninsured health care population of this state is
estimated to be over three hundred sixty-five thousand persons,
and many thousands more lack adequate insurance coverage. It is
also estimated that approximately two thirds of the uninsured are
employed or dependents of employed persons.
(3) Over one third of the uninsured health care population
are children. Uninsured children are of particular concern
because of their need for ongoing preventative and primary care. Measures not taken to care for these children now will result in
higher human and financial costs later.
(4) Uninsured children lack access to timely and appropriate
primary and preventive care. As a result, health care is often
delayed or foregone, resulting in increased risk or the
development of more severe conditions, which, in turn, are more
expensive to treat. This tendency to delay care and to seek
ambulatory care in hospital-based settings also causes
inefficiencies in the health care system.
(5) Health care markets have been distorted through cost
shifts for the uncompensated health care costs or uninsured
citizens of this state, which has caused decreased competitive
capacity on the part of those health care providers who serve the
poor and increased costs of other health care payors.
(6) Although the proper implementation of spenddown
provisions under current medical assistance programs should
result in the provision of most hospital care for the uninsured
through the medical assistance program, hospitals vary widely in
the application of the spenddown provision so patients can
qualify for medical assistance.
(7) No one sector can absorb the cost of providing health
care to citizens of this state who cannot afford health care on
their own. The cost is too large for the public sector alone to
bear and instead requires the establishment of a public and
private partnership to share the costs in a manner economically
feasible for all interests. The magnitude of this need alsorequires that it be done on a time-phased, cost-managed and
planned basis.
(8) Eligible children in this state should have access to
cost-effective, comprehensive primary health coverage if they are
unable to afford coverage or obtain it.
(9) Care should be provided in appropriate settings by
efficient providers, consistent with high quality care and at an
appropriate stage, soon enough to avert the need for more
expensive treatment.
(10) Equity should be assured among health providers and
payors by providing a mechanism for providers, employers, the
public sector and patients to share in financing indigent
children's health care.
§16-2I-3. Definitions.
The following words and phrases when used in this article
have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Cabinet" means the governor's cabinet on children and
families.
"Child" means a person under thirteen years of age except as
provided for in section four of this article.
"Children's medical assistance" means medical assistance
services to children as required under Title 14 of the Social
Security Act (Public Law 74-271, 42 U.S.C. § 301 et seq.),
including EPSDT services.
"Council" means the children's health advisory councilestablished in section four, subsection (i) of this article.
"EPSDT" means early and periodic screening, diagnosis and
treatment.
"Fund" means the children's health fund for health care for
indigent children established by section three, article
seventeen, chapter eleven of this code.
"Genetic status" means the presence of a physical condition
in an individual which is a result of an inherited trait.
"Grantee" means an entity selected by the management team to
receive a grant under chapter seven, the term includes an entity,
and its subsidiary, including, but not limited to, hospital plan
corporations, health services plan corporations, insurance
companies and health maintenance organizations.
"Group" means a group for which a health insurance policy is
written in this state.
"Health maintenance organization" or "HMO" means an entity
organized and regulated under the provisions of section two,
article two-d of this chapter.
"Health service corporation" means a professional health
service corporation as set out in section two, article
twenty-four, chapter thirty-three of this code.
"Hospital" means an institution primarily engaged in
providing to inpatients, by or under the supervision of
physicians, diagnostic and therapeutic services for medical
diagnosis, treatment and care of injured, disabled or sick
persons, or rehabilitation services for the rehabilitation ofinjured, disabled or sick persons. The term also includes
psychiatric and tuberculosis hospitals.
"Insurer" means any insurance company, association,
reciprocal, nonprofit hospital plan corporation, nonprofit
professional health service plan, health maintenance
organization, fraternal benefits society or a risk-bearing
preferred provider organization or nonrisk-bearing preferred
provider organization not governed and regulated under the
employee retirement income security act of 1974 (Public Law
93-406, 29 U.S.C. § 1001 et seq.).
"Managed care organization" means a health maintenance
organization or a risk assuming preferred provider organization
or exclusive provider organization, organized and regulated under
the laws of this state.
"Management team" means the children's health insurance
management team established in section four of this article.
"MCH" means maternal and child health.
"Medical assistance" means the programs of medical
assistance established under the provisions of chapter sixteen of
this code.
"Medicaid" means the federal medical assistance program
established under Title XIX of the Social Security Act (Public
Law 74-271, 42 U.S.C. § 1396 et seq.).
"Mid-level health professional" means a physician assistant,
a registered professional nurse, or a nurse midwife.
"Parent" means a natural parent, stepparent, adoptiveparent, guardian or custodian of a child.
"PPO" means a preferred provider organization.
"Preexisting condition" means a disease or physical
condition for which medical advice or treatment has been received
prior to the effective date of coverage.
"Spenddown" means a procedure relating to eligibility for
medical assistance by which persons ineligible for assistance
because of family income may qualify for assistance when the
family income is reduced by the expenditure of moneys for health
care to the extent that the person meets the criteria for
categorically needy assistance programs.
"Subgroup" means an employer covered under a contract issued
to a multiple employer trust or to an association.
"Terminate" means includes cancellation, nonrenewal and
rescission.
"Waiting period" means a period of time after the effective
date or enrollment during which a health insurance plan excludes
coverage for the diagnosis or treatment of one or more medical
conditions.
"WIC" means the federal supplemental food program for women,
infants and children.
§16-2I-4. Children's health care.
(a) Dedicated funding. -- The fund shall be dedicated
exclusively for distribution by the management team for free and
subsidized health care services under this section.
(b) Distribution of fund. --
(1) The fund shall be used to fund health care services for
children as specified in this section. The management team shall
assure that the program is implemented statewide. All grants
made under this section shall be on an equitable basis, based on
the number of enrolled eligible children or on eligible children
anticipated to be enrolled. The management team shall use its
best efforts to provide grants that ensure that eligible children
across this state have access to health care services to be
provided under this article.
(2) No more than seven and one-half percent of the grant
amount may be used for administrative expenses of the grantees.
If, after the first three full years of operation, any grantee
presents documented evidence that administrative expenses are in
excess of seven and one-half percent of the grant, the management
team may make an additional allotment of funds, not to exceed two
and one-half percent of the grant, for future administrative
expenses to the grantee to the extent that the management team
finds the expenses reasonable and necessary.
(3) No less than seventy percent of the fund shall be used
to provide the health care services provided under this act for
children eligible for the free care under subsection (d) of this
section. When the management team determines that seventy
percent of the fund is not needed in order to achieve maximum
enrollment of children eligible for free care and promulgates a
final rule the provisions of this paragraph are not effective.
(4) The management team shall submit a budget request to theLegislature for funding necessary for the operation of the
council and the management team.
(5) To ensure that inpatient hospital care is provided to
eligible children, each primary care physician providing primary
care services shall make necessary arrangements for admission to
the hospital and for necessary specialty care for a child needing
the care and shall continue to care for the child as a medical
assistance provider in the hospital as appropriate. When
appropriate, the grantee, the enrollee and the hospital shall
initiate applications for medical assistance for inpatient
hospital care through spenddown. Payments made under this
paragraph shall be limited to the amount by which the child's
family income exceeds the medically needy income level, also
known as the spenddown amount, under medical assistance.
Payments made under this paragraph shall be considered
reimbursement of costs under another public program of the state
for medical assistance purposes as specified in section
1902(A)(17) of the Social Security Act (Public Law 74-271, 42
U.S.C. § 1396(A)(17)).
(c) Eligibility for enrollment in programs receiving funding
through fund. --
(1) Any organization or corporation receiving funds from the
management team to provide coverage of health care services shall
enroll, to the extent that funds are available, any child who
meets all of the following:
(i) Except for newborns, has been a resident of this statefor at least thirty days prior to enrollment.
(ii) Is not covered by a health insurance plan, a self-
insurance plan, or a self-funded plan or is eligible for or
covered by medical assistance.
(iii) Is qualified based on income under subsection (d) or
(e) of this section.
(iv) Has not refused to cooperate with the grantee or the
hospital as provided in subdivision (b)(5).
(2) Enrollment may not be denied on the basis of a
preexisting condition, nor may diagnosis or treatment for the
condition be excluded based on the condition's preexistence.
(d) Free insurance. -- The provision of health care
insurance for eligible children shall be free to a child under
six years of age whose family income is no greater than one
hundred eighty-five percent of the federal poverty level and
shall be free to a child six years of age but less than the
maximum program age whose family income is no greater than one
hundred percent of the federal poverty level, where the maximum
program age shall be:
(1) Thirteen years of age for the period ending September
thirty, one thousand nine hundred ninety-three;
(2) Fourteen years of age for the period ending September
thirty, one thousand nine hundred ninety-four;
(3) Fifteen years of age for the period ending September
thirty, one thousand nine hundred ninety-five;
(4) Sixteen years of age for the period ending Septemberthirty, one thousand nine hundred ninety-six; and
(5) Seventeen years of age thereafter.
(e) Subsidized insurance. --
(1) The provision of health care insurance for an eligible
child who is under six years of age and whose family income is
greater than one hundred eighty-five percent of the federal
poverty level but no greater than two hundred thirty-five percent
of the federal poverty level may be subsidized by the fund at a
rate not to exceed fifty percent.
(2) The difference between the pure premium of the minimum
benefit package in subdivision (l)(7) and the subsidy provided
under this subsection shall be the amount paid by the family of
the eligible child purchasing the minimum benefit package.
(3) The family of an eligible child whose family income
makes the child eligible for free or subsidized care but who
cannot receive care due to lack of funds in the fund may purchase
coverage for the child at cost.
(f) Duties of management team. -- The children's health
insurance management team, comprised of the secretary of tax and
revenue, the governor's cabinet on children and families and the
insurance commissioner, is established. The management team
shall:
(1) Prepare and approve a budget using the amounts collected
from the fund and any other federal or private funds designated
for the fund.
(2) Execute contracts related expanding access to healthcare services for eligible children as provided in this article.
(3) Promulgate regulations necessary for the implementation
and administration of this chapter.
(g) Duties of insurance department. -- The insurance
department shall:
(1) Annually approve insurance rates requested by any
grantee for the coverage of services specified in this article.
(2) Review and approve all contracts executed for the
purpose of expanding access to health care services for eligible
children as provided for in this chapter.
(3) Conduct monitoring and oversight by any contracts
entered into.
(4) Issue an annual report to the governor, the Legislature
and the public for each fiscal year outlining primary health
services funded for the year; detailing the outreach and
enrollment efforts by each grantee; and reporting by county the
number of children receiving health care services from the fund,
the projected number of eligible children and the number of
eligible children on waiting lists for health care services.
(h) Duties of governor's cabinet on children and families.
-- The governor's cabinet on children and families shall:
(1) Provide for staff for assisting the council in carrying
out its duties.
(2) Coordinate and supervise the enrollment outreach
activities related to the health insurance program established
under this chapter.
(3) Monitor, review and evaluate the adequacy, accessibility
and availability of services delivered to children who are
enrolled in the health insurance program established under this
chapter.
(i) Council. -- The children's health advisory council is
established within the governor's cabinet on children and
families as an advisory council.
(1) The council shall consist of twelve voting members.
Members provided for in subparagraphs (iv), (v), (vi), (vii) and
(viii) of this subdivision shall be appointed by the governor.
The council shall be geographically balanced on a statewide basis
and shall include:
(i) The secretary of health and human resources ex officio
or a designee.
(ii) The insurance commissioner ex officio or a designee.
(iii) The secretary of tax and revenue ex officio or a
designee.
(iv) A representative with experience in children's health
from a school of medicine located in this state.
(v) A physician with experience in children's health
appointed from a list of three qualified persons recommended by
the West Virginia Medical Association.
(vi) A representative of a children's hospital or a hospital
with a pediatric outpatient clinic appointed from a list of three
persons submitted by the West Virginia Hospital Association.
(vii) A parent of a child who receives primary health carecoverage from the fund. The initial appointment shall be a
parent of a child who is eligible to receive primary health care
coverage from the fund.
(viii) A mid-level professional appointed from lists of
names recommended by statewide associations representing
mid-level health professionals.
(ix) The chairman and the minority leader of the health
committee of the Senate and the chairman and the minority leader
of the health committee of the House of Delegates ex officio or
their designees.
(2) All initial appointments to the council shall be made
within sixty days of the effective date of this article, and the
council shall commence operations immediately thereafter. If any
specified organization should cease to exist or fail to make a
recommendation within ninety days of a request to do so, the
council shall specify a new equivalent organization to fulfill
the responsibilities of this section.
(3) The Secretary of tax and revenue shall chair the
council. The members of the council shall annually elect, by a
majority vote of the members, a vice chairperson from among the
members of the council.
(4) The presence of seven members shall constitute a quorum
for the transacting of any business. Any act by a majority of
the members present at any meeting at which there is a quorum
shall be deemed to be that of the council.
(5) All meetings of the council shall be open to the public. The council shall meet at least quarterly during its first year
of operation and annually thereafter and may provide for special
meetings as it deems necessary. Meeting dates shall be set by a
majority vote of members of the council or by call of the
chairperson upon seven days' notice to all members. The council
shall publish a schedule of its meetings. Notice shall be
published at least once in each calendar quarter and shall list
a schedule of meetings of the council to be held in the
subsequent calendar quarter. Notice shall specify the date, time
and place of the meeting and shall state that the council's
meetings are open to the general public. All actions taken by
the council shall be taken in open public session and shall not
be taken except upon a majority vote of the members present at a
meeting at which a quorum is present.
(6) The members of the council shall not receive a salary or
per diem allowance for serving as members of the council but
shall be reimbursed for actual and necessary expenses incurred in
the performance of their duties.
(7) Terms of council members shall be as follows:
(i) The appointed members shall serve for a term of three
years and shall continue to serve thereafter until their
successors are appointed.
(ii) An appointed member shall not be eligible to serve more
than two full consecutive terms of three years. Vacancies shall
be filled in the same manner in which they were designated within
sixty days of the vacancy.
(iii) An appointed member may be removed by the appointing
authority for just cause and by vote of at least seven members of
the council.
(8) The council shall review and comment on the outreach
plan submitted by any potential grantee as specified in section
five of this article and may make recommendations to the
insurance department.
(9) In conjunction with the governor's cabinet on children
and families the council shall review and evaluate the
accessibility and availability of services delivered to children
enrolled in the program.
(j) Grant criteria. -- The management team shall annually
solicit applications for grants to be made pursuant to this
section as follows:
(1) To the fullest extent practicable, grants shall be made
to applicants that contract with providers to provide primary
care services for enrollees on a cost-effective basis. The
management team shall require grantees to use appropriate cost
management methods so that the fund can be used to provide the
basic primary benefit services to the maximum number of eligible
children and, whenever possible, to pursue and utilize available
public and private funds. This shall include contracting with
qualified, cost-effective providers, including hospital
outpatient departments, HMO's, managed care providers, clinics,
group practices and individual practitioners.
(2) To the fullest extent practicable, the management teamshall ensure that any grantee, who determines that a child is not
eligible because the child is eligible for medical assistance,
provide in writing to the family of the child the telephone
number of the county assistance office where the family can call
to apply for medical assistance.
(k) Health service corporations and hospital plan
corporation. -- Within ninety days of the effective date of this
article each health service corporation and hospital plan
corporation or its entities doing business in this state shall
apply to the insurance department for funds from the fund to
carry out the purposes of this section in the area serviced by
the corporation.
(l) Contracts. -- Any grantee with whom the insurance
department enters into a contract shall do the following:
(1) Ensure to the maximum extent possible that eligible
children have access to primary health care physicians and nurse
practitioners on an equitable statewide basis.
(2) Contract with qualified, cost-effective providers, which
may include primary health care physicians, nurse practitioners,
clinics and health maintenance organizations, to provide primary
and preventive health care for enrollees on a basis best
calculated to manage the costs of the services, including, but
not limited to, using managed health care techniques and other
appropriate medical cost management methods.
(3) Ensure that the family of a child who may be eligible
for medical assistance, receives assistance in applying formedical assistance including, at a minimum, written notice of the
telephone number and address of the county assistance office
where the family can apply for medical assistance.
(4) Maintain waiting lists of children financially eligible
for benefits who have applied for benefits but who were not
enrolled due to lack of funds.
(5) Strongly encourage all providers who provide primary
care to eligible children to participate in medical assistance as
qualified EPSDT providers and to continue to provide care to
children who become ineligible for payment under the fund but who
qualify for medical assistance.
(6) Report annually to the management team and the
Legislature by county and by the provider type on the number of
primary care providers providing primary care to eligible
children.
(7) Provide the following minimum benefit package for
eligible children:
(i) Preventive care. -- This subparagraph includes well-
child care visits in accordance with the schedule established by
the American academy of pediatrics and the services related to
those visits, including, but not limited to, immunizations,
health education, tuberculosis testing and developmental
screening in accordance with routine schedule of well-child
visits. Care shall also include a comprehensive physical
examination, including X rays if necessary, for any child
exhibiting symptoms of possible child abuse.
(ii) Diagnosis and treatment of illness or injury, including
all medically necessary services related to the diagnosis and
treatment of sickness and injury and other conditions provided on
an ambulatory basis, such as laboratory tests, wound dressing and
casting to immobilize fractures.
(iii) Injections and medications provided at the time of the
office visit or therapy; outpatient surgery performed in the
office, a hospital or freestanding ambulatory service center,
including anesthesia provided in conjunction with such service or
during emergency medical service.
(iv) Emergency accident and emergency medical care.
(v) Prescription drugs with a copayment of five dollars per
prescription.
(vi) Emergency, preventive and routine dental care. This
subparagraph does not include orthodontia or cosmetic surgery.
(vii) Emergency, preventive and routine vision care,
including the cost of corrective lenses and frames, not to exceed
two prescriptions per year.
(viii) Emergency, preventive and routine hearing care.
(ix) Inpatient hospitalization up to ninety days per year
for eligible children who cannot qualify through spenddown
provisions for benefits under the medical assistance program.
(x) Spenddown amount as provided for in subdivision (b)(5).
(8) Each grantee shall provide an insurance identification
card to each eligible child covered under a program receiving
grants from the fund. The card must not specifically identifythe holder as low income.
(m) Waiver. -- The governor's cabinet on children and
families may grant a waiver of the minimum benefit package of
subdivision (l)(7) upon demonstration by the applicant that it is
providing health care services for eligible children that meet
the purposes and intent of this section.
(n) Insurance rate filing request information. -- The
insurance commissioner shall make a copy of and forward to the
council all relevant information and data filed by each health
service corporation and hospital plan corporation doing business
in this state or by any other grantee, as part of an insurance
rate filing request for programs receiving grants under this
section.
(o) Review. -- After the first year of operation, and
periodically thereafter, the management team shall review
enrollment patterns for both the free insurance program and the
subsidized insurance program. The management team shall consider
the relationship, if any, among enrollment, enrollment fees,
income levels and family composition. Based on the results of
this study and the availability of funds, the management team is
authorized to adjust the maximum income ceiling for subsidized
insurance by regulation. In no event, however, shall the maximum
income ceiling for free insurance be raised above one hundred
eighty-five percent of the federal poverty level; nor shall the
maximum income ceiling for subsidized insurance be raised above
two hundred thirty-five percent of the federal poverty level. Changes in the maximum income ceiling shall be promulgated as
legislative rules.
§16-2I-5. Outreach.
(a) Plan. -- Any entity seeking funding from the fund for
providing services under this chapter shall provide not less than
two and one-half percent of the grant award in in-kind services
for outreach and shall submit as part of its application to the
management team an outreach plan aimed at enrolling eligible
children in the program established under this article. The plan
shall include provisions for reaching special populations,
including nonwhite and non-English-speaking children and children
with disabilities; for reaching different geographic areas,
including rural and inner-city areas; and for assuring that
special efforts are coordinated within the overall outreach
activities throughout this state.
(b) Review. -- The council shall review the outreach plan
and the performance of the entities receiving funding from the
fund at reasonable intervals and recommend changes in the plan or
in the implementation of the plan as it deems in the best
interests of the children to be served. Outreach activities
shall continue as long as the fund is in existence. In no
instance may a grantee be required to provide in excess of two
and one-half percent of the grant award in in-kind services for
outreach.
(c) Private funding for outreach activities. -- The council,
in conjunction with the grantees, the insurance department, thedepartment of education, the governor's cabinet on children and
families, shall seek funding from private foundations, federal
agencies and other funding sources for the development and
implementation of the outreach plan.
§16-2I-6. Payor of last resort.
The grantee shall not pay any claim on behalf of an enrolled
child unless all other federal, state, local or private resources
available to the child or the child's family are utilized first.
NOTE: The purpose of this bill is to establish a
comprehensive health care system for children in this state. A
surcharge tax is placed on cigarettes and other tobacco products
to fund a program to provide free or subsidized health insurance
for all children. A management team composed of the secretary of
tax and revenue, the governor's cabinet on children and families
and the insurance commissioner is established by the bill. The
management team is responsible for implementing the program.
Children eligible for other insurance coverage must exhaust that
coverage before becoming eligible for this program.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.
Article two-i of chapter sixteen is new; therefore, strike-
throughs and underscoring have been omitted.