Senate Bill No. 565
(By Senators Walker and Prezioso)
[Introduced February 21, 2000; referred to the Committee
on Health and Human Resources; and then to the Committee on
A BILL to repeal section three, article four-a, chapter nine of the
code of West Virginia, one thousand nine hundred thirty-one,
as amended; to amend and reenact sections one, two, three,
four, five and six, article sixteen-b, chapter five of said
code; and to amend and reenact section two-b, article four-a,
chapter nine of said code, all relating to moving the
children's health insurance program from the department of
health and human resources to the department of
administration; combining all eligible children into one
program; and enlarging the eligibility group.
Be it enacted by the Legislature of West Virginia:
That section three, article four-a, chapter nine of the code of West Virginia, one thousand nine hundred thirty-one, as amended,
be repealed; that sections one, two, three, four, five and six,
article sixteen-b, chapter five of said code be amended and
reenacted; 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 care coverage to children; creation
of program; legislative directives.
(a) It is the intent of the Legislature to expand access to
health services for eligible children and to pay for this coverage
by using private, state and federal funds to purchase those
services or purchase insurance coverage for those services. To
achieve this intention, the West Virginia children's health
insurance program is hereby created. The program shall be
administered by the
division of children's health within the bureau
for medical services of the department of health and human
resources children's health insurance agency within the department
of administration in accordance with the provisions of this article and the applicable provisions of Title XXI of the Social Security
Act of 1997. Participation in the program may be made available to
families of eligible children, subject to eligibility criteria and
processes to be established, which shall not create an entitlement
to coverage in any person. 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.
In the event that this article conflicts with the requirements of
federal law, federal law shall govern.
(b) In developing a children's health insurance program that
operates with the highest degree of simplicity and governmental
efficiency, the board shall avoid duplicating functions available
in existing agencies and may enter into interagency agreements for
the performance of specific tasks or duties at a specific or
maximum contract price.
(c) In developing benefit plans, the board may consider any
cost savings, administrative efficiency or other benefit to be
gained by considering existing contracts for services with state
health plans and negotiating modifications of those contracts to
meet the needs of the program.
(d) In order to enroll as many eligible children as possible
in the program created by this article and to expedite the effective date of their health insurance coverage, the board shall
develop and implement a plan whereby applications for enrollment
may be taken at any primary care center and transmitted
electronically to the program's offices for eligibility screening
and other necessary processing.
As used in this article, unless the context clearly requires
a different meaning:
(a) "Agency" means the children's health insurance agency
within the department of administration;
(a) (b) "Board" means the children's health policy board;
(b) (c) "Director" means the director of the children's health
(c) "Division" means the division of children's health
created within the bureau for medical services in the department of
health and human resources;
(d) "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.
(e) "Program" means the West Virginia children's health
§5-16B-3. Reporting requirements.
(a) Annually on the first day of January,
one thousand nine
hundred ninety-nine and annually thereafter, the director shall
report to the governor and the Legislature regarding the number of
children enrolled in the program or programs; the average annual
cost per child per program; the number of children enrolled in the
Medicaid program, pursuant to Title XIX of the Social Security Act,
the public employees insurance agency and private sector insurance
programs; the estimated number of remaining uninsured children; and
the effectiveness of the outreach activities for the previous year.
The report shall include any information that can be obtained
regarding the prior insurance and health status of the children
enrolled in programs created pursuant to this article. Beginning with the second annual report, the director The report shall
include information regarding the cost, quality and effectiveness
of the health care delivered to enrollees of this program;
satisfaction surveys; and health status improvement indicators.
The board, in conjunction with other state health and insurance
agencies, shall develop indicators designed to measure the quality
and effectiveness of children's health programs, which information
shall be included in the annual report.
(b) On a quarterly basis, the director shall provide reports
to the legislative oversight commission on health and human
resources accountability on the number of children served,
including the number of newly enrolled children for the reporting
period and current projections for future enrollees; outreach
efforts and programs; statistical profiles of the families served
and health status indicators of covered children; the average
annual cost of coverage per child, the total cost of children
served by provider type, service type and contract type; outcome
measures for children served; reductions in uncompensated care;
performance with respect to the financial plan and any other
information as the legislative oversight commission on health and
human resources accountability may require.
(c) The director shall report initial statistical information on the children's program to the legislative oversight commission
on health and human resources accountability. The report shall
include, but not be limited to, the number of uninsured children
eligible for the program, statistical information regarding the
families of eligible children, and the projected average annual
cost of coverage per child.§5-16B-4. Children's health policy board created; qualifications
and removal of members; powers; duties; meetings; and
(a) There is hereby created the West Virginia children's
board, which shall consist of the director
of the public employees insurance agency, the secretary of the
department of health and human resources or his or her designee,
and five citizen members appointed by the governor, one of whom
shall represent children's interests and one of whom shall be a
certified public accountant, to assume the duties of the office
immediately upon appointment, pending the advice and consent of the
Senate. A member of the Senate, as appointed by the Senate
president and a member of the House of Delegates, as appointed by
the speaker of the House of Delegates, shall serve as nonvoting
members. Of the citizen members first appointed, one shall serve
one year, two shall serve two years and two shall serve three years. All future subsequent appointments shall be for terms of
three years, except that an appointment to fill a vacancy shall be
for the unexpired term only. Three of the citizen members shall
have at least a bachelor's degree and experience in the
administration or design of public or private employee or group
benefit programs and the children's representative shall have
experience that demonstrates knowledge in the health, educational
and social needs of children. No more than three citizen members
may be members of the same political party and 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. The members shall elect a chairperson. The director
of the agency shall serve as the chairperson of the board. No
member may be removed from office by the governor except for
official misconduct, incompetence, neglect of duty, neglect of
fiduciary duty or other specific responsibility imposed by this
article, or gross immorality. Vacancies in the board shall be
filled in the same manner as the original appointment.
(b) The purpose of the board is to develop plans for health services or health insurance that are specific to the needs of
children and to bring fiscal stability to this program through
development of an annual financial plan designed in accordance with
the provisions of this article.
(c) Notwithstanding any other provisions of this code to the
contrary, any insurance benefits offered as a part of the programs
designed by the board are exempt from the minimum benefits and
coverage requirements of articles fifteen and sixteen, chapter
thirty-three of this code.
(d) The board may consider adopting the maximum period of
continuous eligibility permitted by applicable federal law,
regardless of changes in a family's economic status, so long as
other group insurance does not become available to a covered child.
(e) The board shall meet at the time and place as specified by
the call of the chairperson or upon the written request to the
chairperson by at least two members. Notice of each meeting shall
be given in writing to each member by the chairperson at least
three days in advance of the meeting. Four voting members shall
constitute a quorum.
(f) For each day or portion of a day 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-5. Director of the children's health insurance program;
qualifications; powers and duties.
A division An agency director shall be appointed by the
governor, with the advice and consent of the Senate, and shall be
responsible for the implementation, administration and management
of the children's health insurance program created under this
article. The director shall have at least a bachelor's degree and
a minimum of three years experience in health insurance
(b) The director shall employ any administrative, technical
and clerical employees as are required for the proper
administration of the program and for the work of the board. He or
she shall present recommendations and alternatives for the design
initial and annual plans and other actions undertaken by the
board in furtherance of this article.
(c) The director
under the supervision of the board, is
responsible for the administration and management of the program
and shall have the power and authority to make all rules necessary
to effectuate the provisions of this article.
Nothing in this
article shall limit may be construed as limiting the director's
ability otherwise lawful authority to manage the program on a day-to-day basis.
(d) The director shall have exclusive authority to execute any
contracts as are necessary to effectuate the provisions of this
article: Provided, That the board shall approve all contracts for
the provision of services or insurance coverage under the program.
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 any health
insurance coverage, health services, or professional services
authorized to be executed under the provisions of this article:
Provided, however, That before entering into any such contract the
director shall invite competitive bids from all qualified entities
and shall deal directly with those entities in presenting
specifications and receiving quotations for bid purposes. The
director shall award those contracts on a competitive basis taking
into account the experience of the offering agency, corporation,
insurance company or service organization. Before any proposal to
provide benefits or coverage under the plan is selected, the
offering agency, corporation, insurance company or service
organization shall 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 the contracts on a competitive basis.
(e) The director shall issue requests for proposals on a
regional or statewide basis from essential community health service
providers for defined portions of services under the children's
health insurance plan,
regionally or statewide, and shall, to the
greatest extent practicable, either contract directly contract
with, or require participating providers to contract with,
essential community health service providers to provide the
services under the plan.
(f) Subject to the advice and consent of the board, the
director may require reinsurance of primary contracts, as
contemplated in the provisions of sections fifteen and fifteen-a,
article four, chapter thirty-three of this code.
§5-16B-6. Financial plans requirements.
(a) Benefit plan design. -- All financial plans required by
this section shall establish: (1) The design of a benefit plan or
plans; (2) the maximum levels of reimbursement to categories of
health care providers; (3) any cost containment measures for
implementation during the applicable fiscal year; and (4) 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.
(b) Initial plan. -- For presentation to the board at the
first meeting, the governor shall prepare: (1) A statement of
goals and objectives of the children's health program; and (2) an
estimate of the total amount of general and special revenues
available to fund the program for the fiscal year ending on the
thirtieth day of June, one thousand nine hundred ninety-nine. The
initial plan is subject to the following guidelines:
(1) The board shall establish a target date for implementation
of the program during the state fiscal year one thousand nine
hundred ninety-nine and may offer the same benefit package as that
offered to children of state employees insured through the public
employees insurance agency.
(2) During state fiscal year one thousand nine hundred ninety-
nine, benefits under this program shall be made available to
children ages six through eighteen 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.
(3) All program costs, including the administration of the program and incurred but unreported claims, shall not exceed
eighty-five percent of the funding available to the program for the
state fiscal year one thousand nine hundred ninety-nine.
(4) 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
(c) (b) Actuary requirements. -- Beginning with state fiscal
year two thousand, any financial plan, or modifications, approved
or proposed by the board shall be submitted to and reviewed by an
actuary before final approval. The financial plan shall be
submitted to the governor and the Legislature with the actuary's
written professional opinion that all estimated program and
administrative costs of the agency under the plan, including
incurred but unreported claims, will not exceed ninety percent of
the funding available to the program for the fiscal year for which
the plan is proposed; and, that the financial plan allows for no
more than thirty days of accounts payable to be carried over into
the next fiscal year. This actuarial requirement is in addition to
any requirement imposed by Title XXI of the Social Security Act of
(d) (c) Subsequent Annual plans. -- The board shall review
implementation of its initial or current financial plan in light of
actual experience and shall prepare an annual financial plan for
fiscal year two thousand and each fiscal year thereafter during
which the board remains in existence. For each fiscal year, the
governor shall provide an estimate of requested appropriations and
total funding available to the board no later than the first day of
July of the preceding fiscal year fifteenth day of October
preceding the fiscal year. 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. The board shall submit its final,
approved financial plan, subject to the actuarial and public
hearing requirements of this article, 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. Annual plans developed pursuant to
this subsection are subject to the provisions of subsections (a)
and (c) (b) of this section and the following guidelines:
(1) The aggregate actuarial value of the plan established as the benchmark plan should be considered as a targeted maximum or
limitation in developing the benefits package.
(2) All estimated program and administrative costs, including
incurred but not reported claims, shall not exceed ninety percent
of the funding available to the program for the applicable fiscal
(3) The state's interest in achieving health care services for
all its children at less than two hundred percent of the federal
level guideline shall take precedence over enhancing the
benefits available under this program.
(e) (d) 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.
(f) (e) The board shall meet no less than once each quarter to
review implementation of its current financial plan and, using
actuarial data, shall make those modifications to the plan that are
necessary to ensure its fiscal stability and effectiveness of
service. 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 a true emergency. The board may not expand the
population of children to whom the program is made available except
in its annual plan: Provided, That upon the effective date of this section, the board may expand coverage to any child eligible under
the provisions of Title XXI of the Social Security Act of 1997:
Provided, however, That the board shall implement cost-sharing
provisions through enrollment fees, premiums, copayments or
deductibles for any child whose family income would exceed one
hundred fifty percent of the federal poverty guideline.
(f) The board may develop and implement a program or programs
to provide for the subsidization of employer-based family health
insurance coverage and for family health insurance coverage to be
offered by the children's health insurance program, within the
limits allowed under the provisions of Title XXI of the Social
Security Act of 1997 or the regulations promulgated thereunder:
Provided, That any family health insurance coverage offered by the
program shall be structured so that the board assumes no financial
risk: Provided, however, That families covered by any insurance
offered by the program shall be subject to cost-sharing provisions
which may include, without limitation, enrollment fees, premiums,
copayments or deductibles, as determined by the board, based on
ability to pay: Provided further, That enrollment fees or
premiums, if imposed, may be paid, in whole or in part, through
employer subsidies or other private funds or public funds, subject
(g) 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.
CHAPTER 9. HUMAN SERVICES.
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) The department shall provide a streamlined application
form, which shall be no longer than two pages, for all families
applying for medical coverage for children under any of the
programs set forth in this section.
(2) The department shall provide the option of hospice care to
terminally ill West Virginians who otherwise qualify for medicaid.
The department shall provide quarterly reports to the legislative
oversight commission on health and human resources accountability created pursuant to section four, article twenty-nine-e, chapter
sixteen of this code regarding the program provided for in this
subdivision. The report shall include, but not be limited to, the
total number, by age, of newly eligible clients served, the average
annual cost of coverage per client, and the total cost, by provider
type, to serve all clients.
(3) 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
guideline. The department shall provide quarterly reports to the
legislative 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.
(4) Effective the first day of July, one thousand nine hundred
ninety-eight, the department shall expand medicaid coverage for
only those West Virginia children below the age of six years whose
family income is below one hundred fifty percent of the
federal poverty level. This program will be known as the Title
XXI-Medicaid program and administered in accordance with the applicable provisions contained in Titles XIX and XXI of the Social
Security Act. The department shall coordinate the eligibility
determination, outreach efforts, purchasing strategies, service
delivery system and reporting requirements with the Title XXI
program created pursuant to provisions of article sixteen-b,
chapter five of this code.
(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
(2) and (3) of 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.
(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 programs in
subdivisions (2) and (3) of subsection (a), 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. The department
may not expand the population to be served 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.
NOTE: The purpose of this bill is to move the Children's
Health Insurance Program ("CHIP") from the Department of Health and
Human Resources to the Department of Administration. It combines
all eligible children into one program (instead of two) and permits
the immediate expansion of the program to otherwise eligible
children whose family income is equal to or less than two hundred
percent of the federal poverty guideline.
Strike-throughs indicate language that would be stricken from
the present law and underscoring indicates new language that would