COMMITTEE SUBSTITUTE

FOR

Senate Bill No. 457

(By Senators Walker, Tomblin, Mr. President, Wooton, Fanning, Hunter, Macnaughtan, Craigo, Oliverio, Sharpe, Dittmar, Bailey, Bowman, Snyder, Kessler, Prezioso, Buckalew, Jackson, White, Plymale, Anderson, McKenzie, Sprouse, Chafin, Ball, Ross, Schoonover, Scott, Love, Helmick, Minear and Boley)
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[Originating in the Committee on Health and Human Resources;

reported February 24, 1998.]

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A BILL to amend chapter five of the code of West Virginia, one thousand nine hundred thirty-one, as amended, by adding thereto a new article, designated article sixteen-b; and to amend and reenact section two-b, article four-a, chapter nine of said code, all relating to expanding health insurance coverage to children; defining terms; creating division; requiring employment of director; establishing directors powers and duties; requiring state plan and interagency cooperation; creating program board; establishing qualifications, compensation and procedures governing board members; setting forth purpose, powers and duties of board; requiring financial plans; authorizing the execution of contracts and the procedures governing their award; and expanding medicaid coverage to certain eligible children.

Be it enacted by the Legislature of West Virginia:
That chapter five of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended by adding thereto a new article, designated article sixteen-b; and that section two- b, article four-a, chapter nine of said code be amended and reenacted, all to read as follows:

CHAPTER 5. GENERAL POWERS AND AUTHORITY OF THE GOVERNOR,

SECRETARY OF STATE AND ATTORNEY GENERAL; BOARD

OF PUBLIC WORKS; MISCELLANEOUS AGENCIES, COMMISSIONS,

OFFICES, PROGRAMS, ETC.

ARTICLE 16B. WEST VIRGINIA CHILDREN'S HEALTH INSURANCE PROGRAM.
§5-16B-1. Expansion of health insurance coverage to children.

(a) It is the intent of the Legislature to expand health insurance coverage to eligible children and to pay for this coverage using state dollars to match federal funds. To achieve this intention, the West Virginia children's health insurance program is hereby created.
(b) The design and administration of the program is subject to the provisions of the children's health insurance program created by federal law under Title XXI of the Social Security Act of 1997.
(c) The program created in this article shall be available to families of children subject to eligibility criteria to be established in a state children's health insurance plan which shall be developed pursuant to this article. Nothing in this article shall create an entitlement to coverage in any person or child and nothing in this article may be construed to require any appropriation of state general revenue funds for the payment of any benefit provided for in this article.
(d) Initial statistical information on the children's health insurance program shall be reported to the legislative oversight commission on health and human resources accountability. The report shall include, but not be limited to, the number of covered children, the number of children served
, by age, statistical profiles of the families served, health status indicators of covered children, the average annual cost of coverage per child and the total cost of all children served by provider type.
§5-16B-2. Definitions.
As used in this article, unless the context clearly requires a different meaning:
(a) "Board" means the children's health insurance program board;
(b) "Director" means the director of the children's health insurance program;
(c) "Essential community health service provider" means a health care provider that:
(1) Has historically served medically needy or medically indigent patients and demonstrates a commitment to serve low-income and medically indigent populations which make up a significant portion of its patient population, or, in the case of a sole community provider, serves medically indigent patients within its medical capability; and
(2) Either waives service fees or charges fees based on a sliding scale and does not restrict access or services because of a client's financial limitations including, but not limited to,
community mental health centers, school health clinics, primary care centers, pediatric health clinics or rural health clinics .
§5-16B-3. Division created; director to be employed; powers and duties.

(a) There is hereby created the division of children's health insurance within the bureau for medical services in the department of health and human resources. A division director shall be appointed by the governor, with the advice and consent of the Senate, who shall be responsible for the implementation, administration and management of the children's health insurance program created under this article pursuant to Title XXI of the Social Security Act of l997. The director shall have at least a bachelor's degree and a minimum of three years experience in health insurance administration.
(b) To the extent practicable, the work of the children's health insurance program shall be accomplished through interagency cooperation: Provided, That such employees as are essential to its effective operation may be hired by the director. The director shall provide administrative support for the work of the board and shall present recommendations and alternatives for the design of a children's health insurance program, the initial and annual plans,

and other actions undertaken by the board in furtherance of this article.
§5-16B-4. Preparation of state plan; interagency cooperation.

Upon the effective date of this article, the secretary of the department of health and human resources shall make available to the children's health insurance program staff of the department to prepare, at the direction of the children's health insurance program board and in the name of the board, the state Title XXI plan required by applicable federal law, to include those descriptions, procedures and proposals for implementation under this article and article four-a, chapter nine of this code, that will serve to qualify the state's program for children's health insurance for approval by federal authorities.

§5-16B-5. Children's health insurance program board created; qualifications and removal of members; quorum; compensation and expenses.

(a) There is hereby created the West Virginia children's health insurance program board, which will serve as an advisory board to the division of children's health insurance programs. The board shall consist of nine voting members and shall include the secretary of the department of health and human resources or his or her designee, the director of the public employees insurance agency, the commissioner of the division of insurance, the commissioner of the bureau for public health and five citizen members appointed by the governor, with the advice and consent of the senate
. A member of the Senate, as appointed by its president and a member of the House of Delegates, as appointed by its Speaker, shall serve as non-voting members. Of the initial five citizen members, three shall serve a term of two years and two shall serve a term of four years. Thereafter, citizen members shall serve terms of four years and may be reappointed to their positions: Provided, That no member shall serve more than two consecutive terms. At least one of the citizen members shall have experience in the administration, design or marketing of group benefit programs, at least one of the citizen members shall be a certified public accountant and two of the citizen members shall be the parents or legal guardians of children covered under the provisions of this article. No more than three citizen members may be members of the same political party. No board member shall represent or have a pecuniary interest in an entity reasonably expected to compete for contracts under this article . Members of the board shall assume the duties of the office immediately upon appointment and shall hold an initial meeting not later than the thirtieth day of June, one thousand nine hundred ninety-eight. No member may be removed from office by the governor except for official misconduct, gross immorality, incompetence, neglect of duty or other specific responsibility imposed by this article. Vacancies in the board shall be filled in the same manner as the original appointment.
(b) The board shall elect a chairperson and shall meet at such time and place as specified by the call of the chairperson or upon the written request to the chairperson by either two members of the board or by the director. Notice of each meeting shall be given in writing to each member by the chairperson at least three days in advance of the meeting. Five voting members shall constitute a quorum.
(c) For each day or portion thereof spent in the discharge of duties pursuant to this article, the board shall pay each of its citizen members the same compensation and expense reimbursement as is paid to members of the Legislature for their interim duties.

§5-16B-6. Purpose, powers and duties of the board; initial financial plan; financial plan for following year; and annual financial plans.

(a) The purpose of the children's health insurance program board created by this article is to bring fiscal stability to the children's health insurance program through development of an annual financial plan designed to meet the agency's estimated total financial requirements.
(b) All financial plans required by this section shall include the design of a benefit plan or plans. All financial plans shall establish:
(1) Maximum levels of reimbursement to categories of health
care providers;
(2) Any necessary cost containment measures for
implementation by the director; (3) The types and levels of cost to families of covered
children. To the extent compatible with simplicity of administration, fiscal stability and other goals of the program established in this article, the financial plans may provide for different levels of costs based on ability to pay.
(c)
During state fiscal year 1999, benefits under this program shall be made available to children under age nineteen whose custodial parents or guardians have an income equal to or less than one hundred fifty percent of the federal poverty level as determined according to eligibility standards and other criteria approved by the board.
(d) The board shall establish a target date for implementation of the children's health insurance program during the state fiscal year one thousand nine hundred ninety-nine.
(e) The board shall afford interested and affected persons an opportunity to offer comment on the plan at a public meeting of the board and, in developing any proposed plan under this article, shall solicit comments in writing from interested and affected persons.
(f) The board shall review implementation of its initial or current financial plan in light of actual experience and, with the services of an actuary, shall prepare an annual financial plan for fiscal year two thousand and each fiscal year thereafter. For each fiscal year, the governor shall provide his or her estimate of total available funding to the board no later than the first day of July of the preceding fiscal year. After obtaining an actuary's opinion and conducting one or more public hearings, the board shall submit its financial plan to the governor and to the Legislature no later than the first day of January preceding the fiscal year. The financial plan for a fiscal year shall become effective and shall be implemented by the director on the first day of July of such fiscal year.
(g) The provisions of chapter twenty-nine-a of this code do not apply to the preparation, approval and implementation of the financial plans required by this section.
(h) The board shall meet no less than once each quarter to review implementation of its current financial plan and shall make such modifications to the plan as are necessary to ensure its fiscal stability and effectiveness of service: Provided, That the board may not increase the types and levels of cost to families of covered children during its quarterly review except in the event of an emergency, nor may the board expand the population of children to whom the program is made available except in its annual plan.
(i) For any fiscal year in which legislative appropriations differ from the governor's estimate of general and special revenues available to the agency, the board shall, within thirty days after passage of the budget bill, make any modifications to the plan necessary to ensure that the total financial requirements of the agency for the current fiscal year are met.
§5-16B-7. Authorization to execute contracts.

(a) Subject to the advice and consent of the board, the director shall have authorization to execute such contracts and agreements as are necessary to carry out the provisions of this article.
(b) The provisions of article three, chapter five-a of this code, relating to the division of purchases of the department of finance and administration, shall not apply to any contracts for health insurance coverage or professional health services authorized to be executed under the provisions of this article. Before entering into any such contract, the director shall invite bids from all qualified entities; shall take into account the experience of the offeror; may consider any cost savings, administrative efficiency, or other benefit to be gained from existing contracts for services, including the possible modification thereof, and the extent to which the offeror proposes to utilize essential community health service providers. Before any offeror can be selected to provide benefits or coverage under the plan, it must provide assurances of utilization of essential community health service providers to the greatest extent practicable. In evaluating these factors, the director may employ the services of independent, professional consultants. The director shall then award such contracts on a competitive basis.
(c) The director shall issue requests for proposals from essential community health service providers for defined portions of services under the children's health plan regionally or statewide, and shall, to the greatest extent practicable, either directly contract with, or require participating providers to, contract with essential community health service providers to provide such services under the plan.
(d) Subject to the advice and consent of the board, the director may require an insurer to reinsure portions of any contract entered into pursuant to the provisions of this article.
§5-16B-8. West Virginia children's health fund.

(a) There is hereby created in the state treasury a special revolving fund to be known as the "West Virginia children's health fund," which shall be an interest-bearing account established and maintained to purchase health services for low-income children. All moneys deposited or accrued in this fund shall be used exclusively:
(1) To provide the state's share of the federal children's health insurance program funds, established and maintained to purchase health services for uninsured, low-income children; and
(2) To cover administrative costs associated with the children's health insurance program; and
(3) To cover outreach activities associated with the children's health insurance program and medicaid expansion.
(b) Moneys from the following sources may be placed into the fund:
(1) All public funds transferred by any public agency as contemplated or permitted by applicable federal and state law;
(2) Any appropriations by the legislature;
(3) All private moneys contributed, donated or bequeathed by corporations, individuals or other entities as contemplated and permitted by applicable federal and state law; and
(4) Any accrued interest and return on investments accruing to the fund.
(c) Any balance remaining in the children's health insurance fund at the end of any state fiscal year shall not revert to the state treasury but shall remain in this fund and shall be used only in a manner consistent with this article.
(d) Notwithstanding the provisions of section two, article two, chapter twelve of this code, funds of the West Virginia children's health fund may not be redesignated for any purpose other than those set forth in this subsection.
§5-16B-9. Reporting.
(a) In addition to the reports provided for in sections one, four and six of this article, the director shall, on a quarterly basis, provide reports to the legislative oversight commission on health and human resources accountability.
(b) The reports shall contain
the number of covered children, the number of children served , by age, including those covered under Medicaid, the numbers of new children enrolled for the reporting period and current projections for future enrollees, outreach efforts and programs, statistical profiles of the families served, health status indicators of covered children, the average annual cost of coverage per child, the total cost of all children served by provider, provider type, type of service, contract status, outcome measures for children served, reductions in uncompensated care, performance with respect to financial plan and such other information as the legislative oversight commi ssion on health and human resources accountability may require.
§5-16B-10. Public-private partnerships.

The board and the director are authorized to work in conjunction with a nonprofit corporation organized pursuant to the corporate laws of the state, structured to permit qualification pursuant to section 501(c) of the Internal Revenue Code for purposes of assisting the children's health insurance program and funded from sources other than the state or federal government. Members of the board are authorized to sit on the board of directors of the private nonprofit corporation.
ARTICLE 4A. MEDICAID UNCOMPENSATED CARE FUND.
§9-4A-2b. Expansion of coverage to children and terminally ill.
(a) It is the intent of the Legislature that steps be taken to expand coverage to children and the terminally ill and to pay for this coverage by fully utilizing federal funds. To achieve this intention, the department of health and human resources shall undertake the following:
(1) Effective the first day of July, one thousand nine hundred ninety-four ninety-eight, the department shall initiate a streamlined application form, which shall be no longer than two pages, for all families applying only for medicaid medical coverage for children under any of the programs set forth in this section.
(2) Effective the first day of July, one thousand nine hundred ninety-four, the department shall initiate the option of hospice care to terminally ill West Virginians who otherwise qualify for medicaid. On or before the first day of January, one thousand nine hundred ninety-five, and periodically thereafter, The department shall report provide quarterly reports to the legislative task force on uncompensated health care and medicaid expenditures oversight commission on health and human resources accountability created pursuant to section four, article twenty-nine-c twenty- nine-e, chapter sixteen of this code regarding the program initiation provided for in this subdivision. The report shall include, but not be limited to, the total number, by age, of newly eligible clients served, as a result of the initiation of the program pursuant to this subdivision the average annual cost of coverage per client, and the total cost, by provider type, to serve all clients.
(3) Effective the first day of July, one thousand nine hundred ninety-four, the department shall accelerate the medicaid option for coverage of medicaid to all West Virginia children whose family income is below one hundred percent of the federal poverty level. On or before the first day of January, one thousand nine hundred ninety-five, and periodically thereafter, The department shall report provide quarterly reports to the legislative task force on uncompensated health care and medicaid expenditures oversight commission on health and human resources accountability regarding the program acceleration provided for in this subdivision. The report shall include, but not be limited to, the number of newly eligible clients, by age, served as a result of the acceleration, the average annual cost of coverage per client and the total cost of all clients served by provider type. The report shall also include the medical services trust fund balance and the future disproportionate share moneys expected to be deposited in the medical services trust fund pursuant to section two-a of this article.
(4)Effective the first day of July, one thousand nine hundred ninety-five ninety-eight, the department may initiate the medicaid option to shall expand the current medicaid coverage of children below the age of six years whose family income is below one hundred thirty-three percent of the federal poverty level to include those West Virginia children below the age of six years whose family income is between one hundred thirty-three percent of the federal poverty level and one hundred fifty-percent of the federal poverty level. This program shall be administered in accordance with the applicable provisions of Titles XIX and XXI of the Social Security Act. To prepare for program expansion the department shall submit a report to the governor and the Legislature on the first day of January, one thousand nine hundred ninety-five, regarding the feasibility of the expansion. The report is to include, but not be limited to, the number of newly eligible clients participating in the programs specified in this section, the average annual cost of coverage per client, the percentage of expected participation for the expansion, the projected cost of the expansion, the medical services trust fund balance and the future disproportionate share moneys expected to be deposited in the medical services trust fund pursuant to section two-a of this article. The department shall continually update the additional information required to be provided to the governor and the Legislature regarding this expansion and periodically report the information to the legislative task force on uncompensated health care and medicaid expenditures created pursuant to section four, article twenty-nine-c, chapter sixteen of this code.
(5) Effective the first day of July, one thousand nine hundred ninety-six, the department may initiate the medicaid option to expand coverage of medicaid to all West Virginia children whose family income is below one hundred fifty percent of the federal poverty level. To prepare for program expansion, the department shall submit a report to the governor and the Legislature on the first day of January, one thousand nine hundred ninety-six, regarding the feasibility of the expansion. Additionally, the report is to include, but not be limited to, the number of clients who would be newly eligible to participate in the program, the average annual cost of coverage per client, by age, the percentage of expected participation for the expansion and the projected cost of the expansion, the balance of the medical services trust fund and the future disproportionate share moneys expected to be deposited in the medical services trust fund pursuant to section two-a of this article. The department shall periodically update and report to the legislative task force on uncompensated health care and medicaid expenditures created pursuant to section four, article twenty-nine-c, chapter sixteen of this code regarding the additional information required to be submitted to the governor and the Legislature.
(b) Notwithstanding the provisions of section two-a of this article, the accruing interest in the medical services trust fund may be utilized to pay for the programs specified in subdivisions (2) and (3), subsection (a) of this section: Provided, That to the extent the accrued interest is not sufficient to fully fund the specified programs, the disproportionate share hospital funds paid into the medical services trust fund after the thirtieth day of June, one thousand nine hundred ninety-four, may be applied to cover the cost of the specified programs. Provided, however, That in fiscal year one thousand nine hundred ninety-five, the amount of funds applied from the disproportionate share funds, not including accrued interest, shall not exceed ten million dollars: Provided further, That in the interest of fiscal responsibility, the department shall terminate the program specified in subdivisions (4) and (5) of subsection (a) of this section, if the future moneys deposited from disproportionate share payments in the medical services trust fund are insufficient to cover the cost of the expanded program.
(c) On the first day of January, one thousand nine hundred ninety-five and annually thereafter, the department shall report to the governor and to the Legislature information regarding the number of children and elderly covered by the program programs in subdivisions (2) and (3), subsection (a), of this section, the cost of services by type of service provided, a cost-benefit analysis of the acceleration and expansion on other insurers and the reduction of uncompensated care in hospitals as a result of the programs.
(d) On the first day of January, one thousand nine hundred ninety-nine and annually thereafter, the department shall report to the governor and to the Legislature information regarding the number of children enrolled in the Title XIX medicaid program as a result of implementation of the provisions of subdivision (4), subsection (a) of this section; the number of children enrolled in the new Title XXI medicaid program; the estimated number of children eligible for enrollment in either program; the cost of services by type of service provided in both programs; an analysis of the impact of the programs on other insurers; and the reduction of uncompensated care in hospitals as a result of the programs. The annual report filed by the department shall also include information relating to any proposed expansion of the population to be served under the state's medicaid program, other than the expansions specifically authorized in this section, and any expansion in the population to be served may not be implemented until sixty days following the filing of the report required in this subsection. The department shall make quarterly reports to the legislative oversight commission on health and human resources accountability, established pursuant to section four, article twenty-nine-e, chapter sixteen of this code regarding the development, implementation and monitoring of the program.
(d) (e)The health care cost review authority established by section five, article twenty-nine-b of this chapter shall consider in its rate review that uncompensated care and charity care are reduced by the programs specified in subsection (a) of this section and shall take the reduction into account when determining rates. This determination shall be undertaken in each hospital's next rate review and shall be determined prospectively.
(e) (f) On the first day of January, one thousand nine hundred ninety-five ninety-nine, and annually thereafter, the health care cost review authority shall present to the governor and to the Legislature a report concerning the reduction in cost shift created by the operation of the provisions of this article.
(f) The department shall review the additional utilization by behavioral health centers as a result of the acceleration and expansion for a period of eighteen months from the enactment of this article: Provided, That during the eighteen month study period the department shall not issue additional behavioral health licenses: Provided, however, That this license provision does not apply to facilities filing for renewal applications or to any health care facility which has a certificate of need in effect or an application pending on the first day of March, one thousand nine hundred ninety-four: Provided further, That this licensure prohibition shall not apply to behavior health services provided pursuant to any agreement between state owned psychiatric hospitals which are approved by the federal health care finance administration.

Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added. §5-16B-1 et seq. is new; therefore, strike-throughs and underscoring have been omitted.


TO SENATE HEALTH AND HUMAN RESOURCES COMMITTEE MEMBERS:

I have been asked to report out the children's health fund legislation, Committee Substitute for S.B. 457 first thing this morning. Unfortunately, this makes it impossible for me to show you individually the language used to address the amendments & changes made yesterday,