[Congressional Record Volume 144, Number 45 (Wednesday, April 22, 1998)]
[Extensions of Remarks]
[Page E626]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




  THE STATE CHILDREN'S HEALTH INSURANCE PROGRAM INTEGRITY ACT OF 1998

                                 ______
                                 

                        HON. FORTNEY PETE STARK

                             of california

                    in the house of representatives

                       Wednesday, April 22, 1998

  Mr. STARK. Mr. Speaker, I am pleased to join today with my California 
colleagues, Representatives Henry Waxman, George Miller, Robert Matsui, 
Anna Eshoo and Tom Lantos; and with Representative Sherrod Brown, the 
ranking Democrat on the Commerce Health and Environment Subcommittee, 
to introduce the State Children's Health Insurance Program Integrity 
Act of 1998.
  This legislation is simply a technical correction to the Children's 
Health Insurance Program (CHIP) legislation passed by Congress last 
year--but it is an important technical correction. The bill would 
protect the integrity of state CHIP programs by eliminating the 
potential for direct conflict of interest problems caused by a health 
plan playing dual roles in a state CHIP program. Under this bill, a 
state would be prohibited from allowing a health plan to simultaneously 
administer and participate in the state CHIP program.
  This legislation was developed in direct response to events that 
occurred during the Health Care Financing Administration's (HCFA) 
review and approval process of California's CHIP program (called 
Healthy Families).
  Under California's program, the administrative vendor will perform a 
wide variety of functions including: providing trained staff on the 
program's toll free telephone lines, making eligibility determinations 
and redeterminations, collecting premiums, enrolling and disenrolling 
members, transmitting enrollment information and updates to 
participating health plans, administering the annual open enrollment 
process, and the list goes on and on. These are clearly functions over 
which a participating health plan has tremendous interest and will 
certainly attempt to influence in any system.
  California's CHIP program design would have permitted a private 
health plan to serve as both the administrative vendor and a 
participating health plan. Initially, California did select a private 
health plan to be the administrative vendor of the CHIP program. That 
plan would have run the program (and performed all of the above-
mentioned functions) while also participating as a health plan option 
for low-income children.
  We firmly believe that a system of such a nature is inherently 
biased. And, at a time when there are numerous alternatives to 
selecting a health plan with a financial interest in that market, it is 
a bias that can be easily avoided.
  Our concern regarding California's choice of the administrative 
vendor was alleviated when the private health plan pulled out of the 
contract and the State selected a non-health plan entity as the new 
administrative vendor. We introduce our legislation today to be sure 
that no other states attempt to develop biased programs.
  Our reasoning for the need for such clarifying legislation is 
reinforced by looking at another provision in the Balanced Budget Act 
of 1997 (BBA). The BBA allows state Medicaid programs to choose private 
enrollment brokers to handle the day-to-day enrollment functions of 
their Medicaid programs. However, in allowing these enrollment brokers, 
the law clearly stipulates that the enrollment broker be free of any 
conflicts of interest. Specifically, the law requires that, ``The 
broker is independent of any such entity and of any health care 
providers (whether or not any such provider participates in the State 
plan under this title) that provide coverage of services in the same 
State in which the broker is conducting enrollment activities.''
  Our new legislation would apply the same conflict-of-interest 
standard that exists in the Medicaid enrollment broker law to the CHIP 
law.
  This is an important bill that would protect the integrity of CHIP 
programs around the country. And, we look forward to working with our 
colleagues for passage of the State Children's Health Insurance Program 
Integrity Act this year.




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