[Congressional Record (Bound Edition), Volume 146 (2000), Part 1]
[Extensions of Remarks]
[Page 871]
[From the U.S. Government Publishing Office, www.gpo.gov]



  THE STATE CHILDREN'S HEALTH INSURANCE PROGRAM INTEGRITY ACT OF 2000

                                 ______
                                 

                        HON. FORTNEY PETE STARK

                             of california

                    in the house of representatives

                       Tuesday, February 8, 2000

  Mr. STARK. Mr. Speaker, I join today with Rep. Sherrod Brown, the 
ranking Democrat on the Commerce Health Subcommittee, and my California 
colleagues Representatives Henry Waxman, George Miller, Bob Matsui, 
Anna Eshoo, Tom Lantos, Xavier Becerra and Lynn Woolsey to introduce 
the State Children's Health Insurance Program Integrity Act of 2000.
  This legislation would prohibit any State Children's Health Insurance 
Program (S-CHIP) from allowing a health plan to simultaneously 
administer and participate in the state plan. While it is simply a 
technical correction to S-CHIP, it is important technical correction 
that would eliminate a very real potential for conflict of interest 
problems caused by health plans playing dual roles in state programs.
  The need for this legislation was first brought to our attention in 
1998 when California initially granted a contract to a participating 
health plan to also administer the state CHIP plan. In fact, that 
health plan withdrew its application and the State went with a non-
health plan alternative administrator.
  We are now reintroducing the bill and urging its swift passage 
because it may soon be an issue in California again and could easily 
become an issue elsewhere since there is nothing in federal law that 
prohibits states from granting such contracts. The second 
administrative vendor contract will be negotiated in California later 
this year. Without Congressional action on this issue, it is likely 
that there will once again be competition among participating health 
plans to obtain the vendor contract.
  To further describe the seriousness of this conflict of interest, 
under California's program the administrative vendor performs 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.
  Clearly, allowing plans to play both roles creates an inherent bias. 
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.
  Further evidence that our legislation has real merit can be found in 
another provision of the Balanced Budget Act of 1997 (BBA) which 
included the S-CHIP program. 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 legislation would apply the same conflict-of-interest standard 
that exists in the Medicaid enrollment broker law to the S-CHIP law.
  This is an important bill that would protect the integrity of S-CHIP 
programs across the country. 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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