Senate Bill No. 565
(Senators Walker and Prezioso, original sponsors)
[Passed March 11, 2000; in effect from passage.]
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 the children's
health insurance program; creating the agency within the
department of administration; adding certain definitions;
authority to transfer personnel, equipment and funds; and
expanding availability of insurance coverage to certain
Be it enacted by the Legislature of West Virginia:
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be repealed; that sections one, two, three, four, five and six,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 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 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 governs.
(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.
Upon the transfer of the functions of the children's
health insurance program from the department of health and human
resources to the children's health insurance agency within the
department of administration, the secretary of the department of health and human resources and the secretary of the department of
administration, acting jointly, are empowered to authorize and
shall authorize such transfers of program funds including, but not
limited to, the West Virginia children's health fund created in
section seven of this article and associated investment accounts;
and transfers of children's health insurance program personnel and
equipment, as are necessary, to facilitate an orderly transfer of
the functions of the children's health insurance program.
Authority to make transfers pursuant to this subsection expires on
the thirty-first day of December, two thousand.
(e) 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 or other health care
provider, as determined by the director, and transmitted
electronically to the program's offices for eligibility screening
and other necessary processing. The board may use any funds
available to it in the development and implementation of the plan,
including grant funds or other private or public moneys.
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;
(b) "Board" means the children's health insurance program
(c) "Director" means the director of the children's health
(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 constitute 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. Essential community health
service provider includes, but is 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 insurance program.
§5-16B-3. Reporting requirements.
(a) Annually on the first day of January, 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 estimated number of remaining
uninsured children; and 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.
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 agency, 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.
§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
health insurance 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 six
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 five citizen members first appointed, one shall serve one year, two
shall serve two years and two shall serve three years. All
subsequent appointments shall be for terms of three years, except
that an appointment to fill a vacancy shall be for the unexpired
term only: Provided, That the citizen member to be appointed upon
the reenactment of this section during the regular session of the
Legislature, two thousand, shall serve a term which corresponds to
the term of the member initially appointed to serve one year.
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. 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) 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 administration.
(b) The director shall employ any administrative, technical
and clerical employees that 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
of the annual plans and other actions undertaken by the board in
furtherance of this article.
(c) The director is responsible for the administration and
management of the program and has the power and authority to make
all rules necessary to effectuate the provisions of this article.
Nothing in this article may be construed as limiting the director's otherwise lawful authority to manage the program on a day-to-day
(d) The director has exclusive authority to execute any
contracts that 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 purchasing 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 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 and shall, to the greatest extent
practicable, either contract directly 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) Actuary requirements. -- 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 1997.
(c) Annual plans. -- The board shall review implementation of
its current financial plan in light of actual experience and shall
prepare an annual financial plan for each fiscal year 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 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
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 becomes
effective and shall be implemented by the director on the first day
of July of that fiscal year. Annual plans developed pursuant to
this subsection are subject to the provisions of subsections (a)
and (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 poverty guideline shall take precedence over enhancing the benefits
available under this program.
(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.
(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
article, 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 for children who may qualify for such expanded coverage
and whose family income exceeds one hundred fifty percent of the
federal poverty guideline. Such cost-sharing provisions may be
imposed through any one or a combination of the following:
enrollment fees, premiums, copayments and deductibles.
The board may develop and implement programs that provide
for family coverage and/or employer subsidies within the limits
authorized by the provisions of Title XXI of the Social Security
Act of 1997 or the federal regulations promulgated thereunder:
Provided, That any family health insurance coverage offered by or
through the program shall be structured so that the board assumes
no financial risk: Provided, however, That families covered by any
insurance offered by or through the program shall be subject to
cost-sharing provisions which may include, without limitation,
enrollment fees, premiums, copayments and/or deductibles, as
determined by the board, which shall be 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 to availability, all as
allowed by applicable state and federal law.
(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; and
(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.
(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 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
(c) Annually on the first day of January, 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.