GENERAL ASSEMBLY OF NORTH CAROLINA

EXTRA SESSION 1998

H	1 

HOUSE BILL 3*

Short Title:  State CHIP.  	(Public)

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Sponsors: Representatives Black; Adams, Alexander, Allen, Baddour, Beall, Blue, Bonner, Braswell, Cole, Crawford, Culpepper, Cunningham, Dedmon, Earle, Easterling, Fitch, Fox, Gamble, Goodwin, Hackney, Hardaway, Hensley, Hightower, H. Hunter, R. Hunter, Hurley, Insko, Jarrell, Jeffus, Kinney, Luebke, McCrary, Mercer, Michaux, Miller, Moore, Mosley, Nesbitt, Nye, Oldham, Owens, Ramsey, Redwine, Rogers, Saunders, Smith, Sutton, Tolson, Wainwright, Warner, Warwick, Womble, Wright, and Yongue.

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Referred to:  Appropriations, Subcommittee on Human Resources.

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March 24, 1998

A BILL TO BE ENTITLED
AN ACT TO ESTABLISH THE STATE CHILDREN'S HEALTH INSURANCE PROGRAM AND TO APPROPRIATE FUNDS THEREFOR.
The General Assembly of North Carolina enacts:
Section 1.  Article 2 of Chapter 108A of the General Statutes is amended by adding the following new Part to read:
“Part 8.  Children's Health Insurance Program.
"§ 108A-70.18.  Short title; purpose; no entitlement.
This Part may be cited as the Children's Health Insurance Program Act of 1998.  The purpose of this Part is to provide comprehensive health insurance coverage to uninsured low-income children who are residents of this State.  Coverage shall be provided from State and federal funds appropriated and other funds made available for this purpose. Nothing in this Part shall be construed as obligating the General Assembly to appropriate funds for the Program or as entitling any person to coverage under the Program.
"§ 108A-70.19. _ Program established.
There is established the Children's Health Insurance Program.  The Program shall be administered by the Department of Health and Human Services in accordance with this Part and as required under Title XXI, and related federal rules and regulations.  Claims processing, benefits administration, and eligibility determination processes for the Program shall be as provided under the Medical Assistance Program.  The Department may authorize coverage under the Program to be provided by private insurers so long as the private coverage meets the requirements for coverage under the Program and under Title XXI, and the cost of the private coverage is equal to or less than the cost of equivalent coverage under the Program.
"§ 108A-70.20._ Definitions.
Unless the context clearly requires otherwise, the term:
(1)	‘Comprehensive health coverage' means creditable health coverage as defined under Title XXI.
(2)	‘Family income' has the same meaning as used in determining eligibility for the Medical Assistance Program.
(3)	‘FPL' or _’ federal poverty level' means the federal poverty guidelines established by the United States Department of Health and Human Services, as revised each April 1.
(4)	‘Medical Assistance Program' means the State Medical Assistance Program established under Part 6 of Article 2 of Chapter 108A of the General Statutes.
(5)	‘Program' means the children's health insurance program established in this Part.
(6)	‘State Plan' means the State Child Health Plan for the State Children's Health Insurance Program established under Title XXI.
(7)	‘Title XXI' means Title XXI of the Social Security Act, as added by Pub. L. 105-33, 111 Stat. 552, codified in scattered sections of 42 U.S.C. (1997).
(8)	‘Uninsured' means the applicant for Program benefits is not covered under any private or employer-sponsored comprehensive health insurance plan at the time of application.
"§ 108A-70.21._ Program eligibility; benefits; cost-sharing; appeals.
(a)	Eligibility._– The Department may enroll eligible children based on availability of funds.  In order to be eligible for benefits under the Program, children must:
(1)	Be under the age of 19;
(2)	Be ineligible for Medicaid, Medicare, or other government-sponsored health insurance;
(3)	Be uninsured;
(4)	Be in a family that meets the following family income requirements, without regard to assets:
a.	Infants under the age of one year whose family income is from one hundred eighty-five percent (185%) through two hundred percent (200%) of the federal poverty level;
b.	Children age one year through five years whose family income is from one hundred thirty-three percent (133%) through two hundred percent (200%) of the federal poverty level; and
c.	Children age six years through eighteen years whose family income is from one hundred percent (100%) through two hundred percent (200%) of the federal poverty level; and
(5)	Be a resident of this State or otherwise eligible under federal law.
Proof of family income and residency and a declaration of uninsured status shall be provided by the applicant.
Enrollment shall become effective beginning in the month in which the application is received and shall be effective for one year.  Applicants may reapply for enrollment at the end of each year.  If during the period of enrollment an enrollee fails to meet the requirements of subdivision (1), (2), (3), (4), or (5) of this subsection due to a change in status, the enrollee shall be ineligible for further coverage and shall be disenrolled from the Program.  The family member who is legally responsible for the children enrolled in the Program has a duty to report any change in an enrollee's status within 60 days of the change of status.
(b)	Benefits. – Health benefits coverage provided to children eligible under the Program shall be the same as authorized under the Medical Assistance Program in the Current Operations Appropriations Act.  Except as otherwise provided in this Part, terms, conditions, and limitations on Program benefits shall be the same as apply under the Medical Assistance Program.
(c)	Cost-sharing. – There shall be no premiums charged to Program participants.  There shall be no deductibles, copayments, or other cost-sharing charges for families covered under the Program whose family income is at or below one hundred fifty percent (150%) of the federal poverty level.  Families covered under the Program whose family income is above one hundred fifty percent (150%) of the federal poverty level shall be responsible for copayments to providers as follows:
(1)	Three dollars ($3.00) per child for each physician visit, clinic visit, dental visit, and optometry visit, except that no copayment shall be required for preventive services;
(2)	Five dollars ($5.00) per child for each outpatient hospital visit;
(3)	Three dollars ($3.00) for each brand name prescription filled;
(4)	Twenty dollars ($20.00) for emergency room services for nonemergency care.  As used in this subsection, ‘nonemergency care' shall consist of diagnoses not meeting the definition of ‘true emergency' under the Carolina Access Program.
The total annual aggregate cost-sharing with respect to all children in a family receiving Program benefits under this Part shall not exceed five percent (5%) of the family's income for the year involved.
(d)	Appeals. – Applicants for and participants in the Program who are dissatisfied with the actions of a county or State agency pertaining to eligibility for and benefits under the Program may appeal the action in accordance with procedures established for the Medical Assistance Program pursuant to G.S. 108A-79 and applicable federal regulations.  To the extent the process for appeal under G.S. 108A-79 is inconsistent with appeals under Chapter 150B of the General Statutes, the process under G.S. 108A-79 shall control.
"§ 108A-70.22.  Application for enrollment; outreach.
(a)	The Department shall develop an application form and enrollment process that makes application for and enrollment in the Program as simple, accessible, and efficient as possible.
(b)	The Department shall conduct outreach activities statewide that will effectively provide information about the Program and  will encourage potential participants to inquire and apply for enrollment.  The outreach activities shall be targeted toward families likely to be eligible for benefits under the Children's Health Insurance Program or other health coverage programs to explain the eligibility requirements and benefits available.  The Department may seek private and federal grant funds to conduct outreach activities.  The Department may work with the State Health Plan Purchasing Alliance Board to develop programs that utilize the expertise and resources of the Alliances in outreach activities to employees of small businesses.
"§ 108A-70.23.  State Plan for Children's Health Insurance Program.
The Department shall develop and submit a State Plan to implement the Child Health Insurance Program authorized under this Part to the federal government as application for federal funds under Title XXI.  The Department shall report to the Joint Legislative Health Care Oversight Committee amendments to the State Plan for the Committee's review.
"§ 108A-70.24.  Data collection; reporting.
(a)	The Department shall establish procedures for the collection and analysis of data pertinent to the implementation and continuing evaluation of the Program.
(b)	The Department shall report on October 1 of each year, and more frequently if requested, to the Joint Legislative Health Care Oversight Committee on the implementation of the Program.  The report shall include, but is not limited to, the following:
(1)	Number of children enrolled in the Program;
(2)	Program areas that are working well and those that need improvement;
(3)	Recommendations on ways to improve the efficiency and effectiveness of the Program; and
(4)	Any other items requested by the Joint Legislative Health Care Oversight Committee.
The Department shall provide a copy of the report to the Joint Appropriations Subcommittee on Health and Human Services.
"§ 108A-70.25.  Fraudulent misrepresentation.
(a)	It shall be unlawful for any person to knowingly and willfully, and with intent to defraud, make or cause to be made a false statement or representation of a material fact in an application for coverage under this Part or intended for use in determining eligibility for coverage.
(b)	It shall be unlawful for any applicant, participant, or person acting on behalf of the applicant or participant to knowingly and willfully, and with intent to defraud, conceal or fail to disclose any condition, fact, or event affecting the applicant's or participant's initial or continued eligibility to receive coverage under this Part.
(c)	It is unlawful for any person knowingly, willingly, and with intent to defraud, to obtain or attempt to obtain, or to assist, aid, or abet another person, either directly or indirectly, to obtain money, services, or any other thing of value to which the person is not entitled as a participant under this Part, or otherwise to deliberately misuse a Program identification card. This misuse includes the sale, alteration, or lending of the Program identification card to others for services and the use of the card by someone other than the participant to receive or attempt to receive Program coverage for services rendered to that individual.
Proof of intent to defraud does not require proof of intent to defraud any particular person.
(d)	A person who violates a provision of this section shall be guilty of a Class I felony if the value of the coverage wrongfully obtained is more than four hundred dollars ($400.00).  A person who violates a provision of this section shall be guilty of a Class 1 misdemeanor if the value of the coverage wrongfully obtained is four hundred dollars ($400.00) or less.
(e)	For purposes of this section, the word ‘person' includes any natural person, association, consortium, corporation, body politic, partnership, or other group, entity, or organization."
Section 2.  G.S. 120-70.111 reads as rewritten:
"§ 120-70.111.  Purpose and powers of Committee.
(a)	The Joint Legislative Health Care Oversight Committee shall review, on a continuing basis, the provision of health care and health care coverage to the citizens of this State, in order to make ongoing recommendations to the General Assembly on ways to improve health care for North Carolinians. To this end, the Committee shall study the delivery, availability, and cost of health care in North Carolina.  The Committee shall also review, on a continuing basis, the implementation of the State Children's Health Insurance Program established under Part 8 of Article 2 of Chapter 108A of the General Statutes. The Committee may also study other matters related to health care and health care coverage in this State.
(b)	The Committee may make interim reports to the General Assembly on matters for which it may report to a regular session of the General Assembly. A report to the General Assembly may contain any legislation needed to implement a recommendation of the Committee."
Section 3.  G.S. 143-626(2) reads as rewritten:
"(2)	Accept applications by carriers to qualify as Accountable Health Carriers, determine the eligibility of carriers to become Accountable Health Carriers according to criteria described in G.S. 143-629, designate carriers as Accountable Health Carriers, approve one additional qualified health care plan to be offered to small employers beyond the basic and standard health care plans, and approve programs that provide options for the purchase of private insurance for dependent coverage that meets the requirements of the Children's Health Insurance Program established under Part 8 of Article 2 of Chapter 108A of the General Statutes and Title XXI of the Social Security Act."
Section 4. (a) There is appropriated from the General Fund to the Department of Health and Human Services the sum of fourteen million nine hundred eighty-four thousand four hundred forty-seven dollars ($14,984,447) in recurring funds for the 1998-99 fiscal year to be used for the Children's Health Insurance Program established under this act and under Title XXI of the Social Security Act, as added by Pub. L. 105-33, 111 Stat. 552.  The Office of State Budget and Management shall establish a Contingency Reserve for fiscal year 1998-99 and shall deposit into the Reserve ten percent (10%) of the funds appropriated under this section.  Funds in the Reserve shall be used for unanticipated start-up, enrollment, and services costs occurring during the first year of Program implementation.  The Office of State Budget and Management shall include in the proposed continuation budget the amount of State funds necessary for Program implementation for the budgeted fiscal year but not more than the amount necessary to draw down the maximum amount of federal funds available to the State for the budgeted fiscal year for the Children's Health Insurance Program under Title XXI of the Social Security Act, as added by Pub. L. 105-33, 111 Stat. 552.
(b) Of the funds appropriated under subsection (a) of this section, the Department may use up to two million dollars ($2,000,000) to cover unmatched start-up costs for the Children's Health Insurance Program established under this act.
(c) Funds appropriated under this section and not expended or obligated in the 1998-99 fiscal year shall revert to the General Fund on June 30, 1999.
(d) No State funds appropriated under this act may be expended for any purpose other than implementation of the State Children's Health Insurance Program established under this act and approved by the United States Secretary of Health and Human Services under Title XXI of the Social Security Act, as added by Pub. L. 105-33, 111 Stat. 552.
Section 5.  Section 4 of this act becomes effective July 1, 1998.  Health insurance coverage provided to children under the Children's Health Insurance Program established in this act shall become effective no earlier than October 1, 1998.  The remainder of this act is effective when it becomes law.