H. B. 4299

(By Mr. Speaker, Mr. Kiss and Delegates Martin, Compton, Leach, Douglas, Staton and Capito)

[Introduced February 6, 1998; referred to the
Committee on Finance.]

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; to amend and reenact section two-b, article four-a, chapter nine of said code; and to further amend said article four-a by adding thereto a new section, designated section three, creating a children's health insurance program; expanding availability of insurance coverage to certain eligible children; requiring reporting; creating a children's health insurance program board, specifying membership and qualifications of members, compensation and expenses; providing for employment of an executive director and providing powers and duties; authorizing contracts; providing for powers and duties of the board, including duties to provide fiscal stability for the children's health insurance program; providing for preparation of state plan through interagency cooperation; creating a special revolving fund known as the West Virginia CHIP fund; providing guidelines to be considered by the board and executive director in developing and planning administration of the children's health insurance program; providing for termination and reauthorization; expanding medicaid coverage to certain eligible children; and creating a special revolving fund known as the West Virginia mini-CHIP fund.

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; that section two-b, article four-a , chapter nine of said code be amended and reenacted; and that said article four-a be further amended by adding thereto a new section, designated section three, 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 by utilizing federal funds. To achieve this intention, the West Virginia children's health insurance program is hereby created.
(b) The children's health insurance program created in this article is subject to the following requirements:
(1) Program design and administration 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, including but not limited to the cost-sharing and benefit rules established in federal law. In the event that this article conflicts with the requirements of federal law, federal law shall govern.
(2) The population covered under the program is limited to children to age nineteen, who are not covered under any health insurance plan, who are not eligible for coverage under a group health insurance plan available to a parent or guardian, and who are not medicaid-eligible. For purposes of eligibility determination, a COBRA policy, as defined in chapter thirty-three of this code, is not a group-sponsored plan available to a parent or guardian.
(c) The program created in this article may be made available to families of eligible children subject to eligibility criteria and processes to be established in a state children's health insurance plan to be developed pursuant to this article and 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.
(d) Implementation of the children's health insurance program shall be reported to the legislative oversight commission on health and human resources accountability regarding the program provided for in this article. The report shall include, but not be limited to, the number of covered children, by age, served, 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) "Executive director" means the executive director of the children's health insurance program;
(c) "Benchmark plan" means the insurance benefit plan currently offered within the state that meets requirements of applicable federal law and is identified by the board as the benefit plan that will be used in determining the minimum aggregate actuarial value and targeted maximum actuarial value for benefits provided under a children's health insurance program in this state. The "benchmark plan" may also serve to set the minimum level of pharmacy, mental health or other specified services that may under applicable federal law be provided under a children's health insurance program. Selection of a benefit plan as the "benchmark plan" does not serve as an indicator of who will be awarded contracts or participate in administering a children's health insurance program.
(d) "Benchmark-equivalent plan" means the benefit plan, designed to serve the unique health care needs of children, that is at least actuarially equivalent to the plan selected by the board as the benchmark plan, that the board develops and approves after considering the goals and objectives for a children's health insurance program presented by the governor and the guidelines for a children's health insurance program set forth in this article.
§5-16B-3. 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 shall consist of the executive director of the children's health insurance program, the director of the public employees insurance agency, the secretary of the department of health and human resources or his or her designee, the insurance commissioner, and five citizen members appointed by the governor, to assume the duties of the office immediately upon appointment pending the advice and consent of the senate. The five 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. No more than three citizen members may be members of the same political party. A lobbyist registered pursuant to chapter six-b of this code, a person representing the interests of a health care network or private insurer reasonably expected to compete for contracts under this article, or a private provider of health care services reasonably expected to receive reimbursement for health care services pursuant to this article may not serve on the board. All members of the board shall assume the duties of the office immediately upon the appointment and shall meet at the call of the chair not later than the thirtieth day of April, one thousand nine hundred ninety-eight. 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 director of the public employees insurance agency shall serve as chairperson of the board until such time as an executive director of the children's health insurance program assumes the duties of the office pursuant to section four of this article, when the executive director shall take a seat on the board and assume the duties of the chair. The board shall meet at such time and place as shall be specified by the call of the chairperson or upon the written request to the chairperson of 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. Five members shall constitute a quorum. The board shall pay each of the citizen members appointed by the governor the same compensation and expense reimbursement as is paid to members of the Legislature for their interim duties as recommended by the citizens legislative compensation commission and authorized by law for each day or portion thereof engaged in the discharge of official duties.

§5-16B-4. Executive director of the children's health insurance program; powers and duties.

The board shall employ an executive director with at least a bachelor's degree and at least three years experience in health insurance administration to serve at the will and pleasure of the board. The executive director shall employ such administrative, technical and clerical employees as are required for the proper administration of the program provided for in this article: Provided, That to the extent practicable, the work of the children's health insurance program created in this article shall be accomplished by employees of the public employees insurance agency, the department of health and human resources and other agencies of the state through interagency cooperation or pursuant to section five of this article. The executive director shall perform such duties as are required of him or her under the provisions of this article and is the chief administrative officer of the children's health insurance program.
(c) The executive 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. The executive director is responsible for the administration and management of the program provided for in this article and in connection with his or her responsibility shall have the power and authority to make all rules necessary to effectuate the provisions of this article. Nothing in this article shall limit the executive director's ability to manage on a day-to-day basis the program required or authorized by this article, including, but not limited to, administrative contracting, studies, analyses and audits, utilization management provisions and incentives, provider negotiations, provider contracting and payment, designation of covered and noncovered services, offering of additional coverage options or cost containment incentives, pursuit of coordination of benefits and subrogation, or any other actions which would serve to implement the plan or plans designed by the board.
§5-16B-5. Authorization to execute contracts.
(a) The executive director is hereby given exclusive authorization to execute such contract or contracts as are necessary to carry out the provisions of this article, including contracts with insurers or health care networks that meet standards and qualifications approved by the board.
(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 any health insurance coverage, health services, or professional services authorized to be executed under the provisions of this article. Before entering into any contract for any health insurance coverage or health services, the executive director shall invite competent bids from all qualified entities, and shall deal directly with health care networks, health care providers and insurers in presenting specifications and receiving quotations for bid purposes. The executive director shall award such contract or contracts on a competitive basis. In awarding the contract or contracts the executive director shall take into account the experience of the offering agency, corporation, insurance company or service organization. The executive director 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 children's health insurance program. In evaluating these factors, the executive director may employ the services of impartial, professional insurance analysts or actuaries or both.
(c) The executive director may issue requests for proposals for community mental health centers, school health clinics, primary care centers or rural health clinics to provide defined portions of services under the children's health plan regionally or statewide, and may require provider networks contracting to provide benefits under the plan to contract with community mental health centers, school health clinics, primary care centers or rural health clinics, and other safety net county or community facilities as may be defined by the board.
(d) The executive director may authorize the carrier with whom a primary contract is executed to reinsure portions of such contract with other carriers which elect to be a reinsurer and who are legally qualified to enter into a reinsurance agreement under the laws of this state.
(e) The executive director may at the end of any contract period discontinue any contract or contracts it has executed with any carrier and replace the same with a contract or contracts with any other carrier or carriers meeting the requirements of this article.

§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, taking into account all funding projected to be made available to the agency.
(b) The board, by the executive director, shall contract for actuarial services. The professional actuary retained by the public insurance agency finance board to estimate the total financial requirements of the public employees insurance agency for each fiscal year and to review and render written professional opinions as to financial plans proposed by the public employees insurance agency finance board may also serve as actuary to the children's health insurance program board to perform the services required in this section and to perform such other services as may be requested by the board. All reasonable fees and expenses for actuarial services shall be paid by the children's health insurance program.
(c) Beginning with state fiscal year two thousand, any financial plan or modifications to a financial plan approved or proposed by the board pursuant to this section shall be submitted to and reviewed by an actuary, and may not be finally approved and submitted to the governor and to the Legislature without the actuary's written professional opinion that all estimated program and administrative costs of the agency under the plan, excluding incurred but unreported claims, will not exceed ninety percent of the funding available to the children's health insurance program for the fiscal year for which the plan is proposed. The actuary's opinion on the financial plan for any fiscal year shall allow for no more than thirty days of accounts payable to be carried over into the next fiscal year. The actuary's opinion for any fiscal year shall not include a requirement for establishment of a reserve fund.
(d) 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.
(e) Initial plan. -- The chairperson shall convene the first meeting of the board no later than the thirtieth day of April, one thousand nine hundred ninety-eight. For presentation by the chairperson at the first meeting, the governor shall prepare (1) a statement of goals and objectives of the children's health insurance program and (2) an estimate of the total amount of general and special revenues which the state has or will have available to fund the children's health insurance 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) Plan design and administration 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, including but not limited to the cost-sharing and benefit rules established in federal law.
(2) In order to implement health insurance coverage at the earliest feasible date, the initial plan may offer the same benefit package as that offered to children of state employees insured through the public employees insurance agency, or another benchmark plan meeting the requirements of federal law and selected by the board.
(3) The initial plan may pay providers of health care services under the same fee schedule applicable for services provided to dependents of covered state employees, or the fee schedule applicable to another benchmark plan meeting the requirements of federal law and selected by the board .
(4) The initial plan shall make available to children to age nineteen whose custodial parents or guardians have income equal to or less than one hundred thirty five percent of federal poverty as determined according to eligibility standards and other criteria approved by the board: Provided, That the initial plan may make available to children to age nineteen whose custodial parents or guardians have income equal to a higher percentage of federal poverty established by the board, not to exceed two hundred percent of federal poverty, to the extent it reasonably estimates, based on assumptions that may be recommended by its actuary, that all estimated program and administrative costs of the agency under the plan, excluding incurred but unreported claims, will not exceed eighty-five percent of the funding available to the children's health insurance program for the state fiscal year one thousand nine hundred ninety-nine . Coverage under the plan is not an entitlement for any person.
(5) 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.
(6) 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) 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 such fiscal year, the governor shall provide his or her estimate of requested appropriations and total available funding to the board no later than the first day of July of the preceding fiscal year. The board shall submit its final, approved financial plan, after obtaining the necessary actuary's opinion and conducting one or more public hearings in each congressional district, 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 (c) and (d) of this section and the following guidelines:
(1) Plan design and administration 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, including but not limited to the cost-sharing and benefit rules established in federal law.
(2) The board may develop and offer a benchmark-equivalent benefit package that differs from the benefits offered in the benchmark plan selected by the board, so long as the total benefit package is at least actuarially equivalent to the benchmark plan.
(3) The plan may determine a plan for payment of providers of health care services that differs from the same fee schedule applicable for services provided to dependents of covered state employees.
(4) The plan shall make available to children to age nineteen whose custodial parents or guardians have income equal to or less than a percentage of federal poverty established by the board, not to exceed two hundred percent of federal poverty as determined according to eligibility standards and other criteria approved by the board. Coverage under the plan is not an entitlement for any person.
(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 on at least a quarterly basis to review implementation of its current financial plan in light of the actual experience of the children's health insurance program. The board shall review actual costs incurred, any revised cost estimates provided by the actuary, expenditures, and any other factors affecting the fiscal stability of the plan, and may make any additional modifications to the plan necessary to ensure that the total financial requirements of the agency for the current fiscal year are met. 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.
(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. 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-8. West Virginia CHIP fund.

(a) There is hereby created in the state treasury a special revolving fund known as the "West Virginia CHIP Fund". 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 incurred by the children's health insurance program board associated with the children's health insurance program and this fund, which may not exceed ten percent of the annual appropriation.
(b) Moneys from the following sources may be placed into the fund:
(1) All public funds appropriated by the Legislature or transferred by any public agency to the children's health insurance program for deposit in the fund as contemplated or permitted by applicable federal program laws;
(2) All private moneys contributed by corporations, individuals or other entities to the fund as contemplated and permitted by applicable federal and state laws;
(3) Any accrued interest; and
(4) Federal financial participation matching the amounts referred to in subdivisions (1), (2) and (3) of this subsection, in accordance with Section 1902 (a) (2) of the Social Security Act.
(c) Any balance remaining in the children's health insurance program 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.
(e) The fund shall be administered by the children's health insurance program by its executive director, or, until such time as the executive director assumes the duties of the office, by the director of the public employees insurance agency. Moneys shall be disbursed from the fund on a quarterly basis. The secretary of the department of health and human resources, in the name of the board, shall submit and receive approval of the state's children's health insurance plan in accordance with the provisions of Title XXI of the Social Security Act of 1997 prior to the receipt of any transfer or contribution from any public or private source.
(f) All moneys expended from the fund after receipt of federal financial participation shall be allocated to reimbursement for health services provided in accordance with the approved plan and the administrative costs as set forth in this article. Expenditures from this fund for any other purposes are void.

§5-16B-9. Guidelines for a children's health benefit package.

In developing a benefit package for a children's health insurance program designed to serve the unique health care needs of children, the board may consider as guidelines the following:
(a) The development of an affordable children's health benefit package designed to serve the needs of uninsured children whose families are not financially eligible to purchase children's health insurance at a subsidized cost is a priority. The board may consider allowing families not eligible for coverage at a subsidized cost to purchase coverage at the full premium rate, and the board may consider small employer buy-ins to the extent these may be designed to be compatible with "crowd-out" provisions of applicable federal law that prohibit creating a program that substitutes for group coverage. Therefore, design of the benefit package should be dollar-driven, and the aggregate actuarial value of the plan established as a benchmark plan should be considered as a targeted maximum or limitation in developing the benefits package.
(b) In balancing the state's interest in expanding coverage to as many children as possible against the state's interest in providing enhanced levels of coverage, until such time as coverage is available to all children at less than two hundred percent of the federal poverty level, the state's interest in providing coverage to more children takes precedence.
(c) In order to include in the benefit package additional coverages especially necessary or beneficial to children, and in order to remain within the cost sharing limitations of applicable federal law, the board may adopt limitations more restrictive than those limitations applicable to the benchmark plan , including, by way of illustration, limitations on inpatient days, units of covered services, or dollar limitations,.
(d) Basic coverages may include:
(1) Those minimum coverages required by applicable federal law;
(2) Additional coverages necessary to protect the public health, which may include, by way of illustration, medical treatments for specific infectious diseases that pose a grave threat to the public health, triage and crisis services for grave mental illnesses that endanger individuals and the public, and specified services for families of children affected by domestic violence.
(3) An additional package of preventative services designed with attention to those most essential services that promote success in school and growing up healthy, which may include, by way of illustration, vision, hearing and dental screening and examination, dental cleaning and fluoride treatments for children, one pair of glasses each year, and hearing aids.
(4) Services to assist in the management of specific chronic conditions, which may include juvenile diabetes and asthma, which if unmanaged and untreated, pose a grave threat to the health of children.
(5) An additional package of medically necessary services available to handicapped and disabled children with a high level of need, which, for specified services, may be limited by billable units of service.
(6) Comfort care for terminally ill children and the most necessary services to families caring for those children.
(e) The benefit package shall be designed to exclude services that are not medically necessary or, to a reasonable degree of medical probability, are unlikely to improve the outcome, benefit the child, restore function, or improve the quality of life for the child.
(f) Except as specifically provided in this section, and within the limits provided by applicable federal law, the board shall consider limiting benefits and levels of coverage provided in a children's health insurance program to those benefits through private health insurance generally available, as determined by the insurance commissioner , to employees of employers in this state employing fifty or fewer employees.
(g) The board may consider exempting from copay requirements, in addition to those specific preventative benefits required to be exempted by federal law, additional services that it determines should be fully utilized to protect the health of children, including, by way of illustration, services to families of children affected by domestic violence and dental fluoride treatments.
(h) The board may consider exempting from copay requirements those specific pharmaceuticals used to treat diagnosed chronic conditions for which compliance with prescribed drug therapy is essential and most often problematic. By way of illustration, the board may exempt copays for a drug prescribed to manage juvenile diabetes or a psychotropic drug to treat a grave mental illness that endangers a child or the public.
(i) Design of the children's health insurance program created in this article shall reflect the most essential health care needs of children and, notwithstanding any other provision of this code to the contrary, is exempt from the minimum benefits and coverage requirements of articles fifteen and sixteen, chapter thirty-three of this code.

§5-16B-10 . Guidelines for administration of a children's health insurance program.

In developing a children's health program that operates with the highest degree of simplicity and governmental efficiency, the board shall avoid duplicating functions available in existing agencies and shall consider as guidelines for administration the following:
(a) The executive director may negotiate and enter into interagency agreements with agencies of the state, which contracts shall require the performing of specific tasks or duties at a specific or maximum contract price, in furthering the purposes of this article. Administrative expense may be paid to the other agencies by interdepartmental transfer. By way of illustration and not by way of limitation, the executive director may contract with the department of education for outreach services; with the department of health and human services for eligibility determination; the bureau of public health for maternal and child health services; and the insurance commissioner for preparation of requirements and standards for case management and quality and utilization monitoring.
(b) The executive director may negotiate and contract with public or private entities, which contracts shall require the performing of specific administrative tasks or duties at a specific or maximum contract price, in furthering the purposes of this article. Administrative expense may be paid out of funds appropriated for this purpose to the children's health insurance program.
(c) The executive director may contract with insurers and health care networks to provide an established set of benefits at a set fee. Insurers and health care networks must be able to meet specific case management, data collection, quality control and utilization review standards. If the executive director contracts with more than one insurer or network in a defined geographic area, the parent or guardian of a covered child residing in that area may choose between available plans.
(d) The application process and eligibility standards shall be designed to provide the highest possible degree of administrative simplicity, in obtaining identifying information; in determining income status; in developing a statistical profile of the population served; and in obtaining such other information required by applicable federal law or determined to be essential. 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. The board may consider limiting enrollment to specified open enrollment periods. The board may consider adopting one or more alternate single standards for financial eligibility, which may include, by way of illustration, a determination of eligibility for free or reduced school lunch, a copy of the previously filed state or federal income tax return showing gross income below a specified level or other standards set by the board.
(e) The executive director may cooperate with the department of health and human resources in the modification of the streamlined application form for children's medicaid benefits, so that the same application form may be used to determine eligibility for the children's health insurance program established in this article and, when appropriate, serve as a referral and application for medicaid coverage.
(f) In the event the board determines that cost-sharing under the plan will include the payment of a premium, in order to provide the highest possible degree of administrative simplicity and avoid the necessity of additional income determinations and verifications , the board may consider imposing a flat premium less than or equal to fifteen dollars per month per family, the minimum premium permitted under section 1916(b)(1) of the Social Security Act, or an equivalent sum calculated to cover a specified benefit period, for all families that are to pay a premium under the plan, and, unless premiums are required to be prepaid for the entire benefit period, may require families of enrolled children to preauthorize direct payment of premiums.
(g) In determining levels of copays in accordance with applicable federal law, in order to provide the highest possible degree of administrative simplicity and avoid the necessity of additional income determinations and verifications , the board may consider imposing flat copays equal to the minimum copay permissible under applicable federal law for all families that are to pay copays under the plan.
(h) The executive director may enter into agreements with entities permitted by applicable federal law to determine eligibility for the program created in this article, which may include, by way of illustration and not by way of limitation, the primary care centers, rural health clinics, the department of education, and school-based health centers.

§5-16B-11. Termination and reauthorization.

(a)The children's health insurance program established in this article abrogates and is of no further force and effect, without any further action by the Legislature, upon the earliest of the following dates:
(1) The date upon which a reduction in the level of federal funds becomes effective for children's health insurance programs created by federal law under Title XXI of the Social Security Act of 1997 , below amounts allocated to the state in the year one thousand nine hundred ninety-nine and below future year reductions contained in the original enactment by the Congress of Title XXI of the Social Security Act of 1997 : Provided, That if an act reducing such funds specifies a date later than the effective date of the legislation on which the reduction of funds takes effect, that later date controls.
(2) The date upon which a judgment or order of a court of competent jurisdiction becomes final disallowing the state plan for a children's health insurance program established by the board under this article.
(3) The date upon which any federal administrative rule or regulation promulgated in conformity with federal law becomes effective which negates the effect or purposes of this article: Provided, That if such rule or regulation specifies a later date on which the prohibition takes effect, that later effective date controls.
(b) Pursuant to the provisions of article ten, chapter four of this code, the board shall terminate on the first day of July, two thousand four, unless extended by legislation enacted before the termination date.
(c) Upon termination of the board and notwithstanding any provisions in this article to the contrary, the executive director of the children's health insurance program is authorized to change the types and levels of costs to the families of enrollees, within the limits permitted by applicable federal law, only in accordance with this subsection. Any assessments or changes in costs imposed pursuant to this subsection shall be implemented by rules of the director proposed to the legislature pursuant to the provisions of chapter twenty-nine-a of this code. Any costs authorized by the board shall remain in effect until amended by rule of the director promulgated pursuant to this subsection.
CHAPTER 9. HUMAN SERVICES.

ARTICLE 4A. MEDICAID UNCOMPENSATED CARE FUND.

§9-4A-2b. Expansion of coverage to children and terminally ill; West Virginia children's health insurance plan.

(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 The department shall report report quarterly 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 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.
(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 medicaid coverage of medicaid to all for only those West Virginia children below the age of six years whose family income is below one hundred thirty-three fifty percent of the federal poverty level. This program will be known as "mini-CHIP" 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 "CHIP" program created pursuant to provisions of article sixteen-b, chapter five of this code. 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 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) 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. 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) 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 medicaid program resulting from the "outreach program"; the number of children enrolled in "mini-CHIP"; 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) 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) On the first day of January, one thousand nine hundred ninety-five, 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 behavioral health services provided pursuant to any agreement for state owned psychiatric hospitals which are approved by the federal health care finance administration.
§9-4A-3. West Virginia mini-CHIP fund.
(a) There is hereby created in the state treasury a special revolving fund to be known as the "West Virginia mini-CHIP Fund", which shall be an interest-bearing account established and maintained to purchase health services for low-income children.
(b) Funds paid into this account shall be derived from the following sources:
(1) Any appropriations by the Legislature;
(2 All public funds transferred by any public agency as permitted by applicable federal law;
(3) Any private funds contributed, donated or bequeathed by corporations, individuals or other entities to the fund as contemplated and permitted by applicable federal law; and
(4) All interest or return on investments accruing to the fund.
(b) Moneys from this fund shall be used exclusively for the following purposes:
(1) To purchase health care services for the program defined in subdivision (4), subsection (a) of this section, associated administrative costs, outreach activities and eligibility determination costs; and
(2) To provide the state's share of the enhanced federal medical assistance percentage funds.
(c) Notwithstanding the provisions of section two, article two, chapter twelve of this code, moneys with the mini-CHIP program may not be redesignated for any purpose other than those set forth in this subsection.





NOTE: This bill creates a children's health insurance program (CHIP) and a children's health program board and authorizes the employment of an executive director. The bill requires that the program be designed to fall within available funding and provides non-mandatory guidelines for program design. A medicaid expansion (mini-CHIP) for children up to 150% of federal poverty to age 6 is authorized.

Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added. Article 16B and section 9-4A-3 are new; therefore, strike-throughs and underscoring have been omitted.