STATE CHILDREN S INSURANCE PROGRAM HEALTH CHOICE. U. S. Department of Health and Human Services. General Statutes 108A
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1 APRIL STATE CHILDREN S INSURANCE PROGRAM State Project/Program: HEALTH CHOICE U. S. Department of Health and Human Services Federal Authorization: State Authorization: Balanced Budget Act of 1997, Title XXI, Subtitle J, Section 4901, Public Law ; Public Law Medicare, Medicaid and SCHIP Balanced Budget Refinement Act of 1999 Public Law , Section 702; Medicare, Medicaid, and SCHIP Benefits Improvement Act of 2000, Title VIII, Section 801, 802, and 803, Public Law General Statutes 108A N. C. Department of Health and Human Services Division of Medical Assistance Agency Contact Persons: Program Cinnamon Narron (919) Cinnamon.Narron@ncmail.net Financial Catherine Stogner (919) Catherine.Stogner@ncmail.net N. C. DHHS Confirmation Reports: SFY 2008 audit confirmation reports for payments made to Counties, Area Programs, Boards of Education, Councils of Government, District Health Departments, DCD State Level Contractors and HRSA Bioterrorism Grant Subrecipients will be available by around late August to early September at the following web address: At this site, page down to Letters/reports/forms for ALL Agencies and click on Audit Confirmation Reports (State Fiscal Year ). Additionally, audit confirmation reports for Nongovernmental entities receiving financial assistance from the DHHS are found at the same website except select Non-Governmental Audit Confirmation Reports (State Fiscal Years ). The auditor should not consider the Supplement to be safe harbor for identifying audit procedures to apply in a particular engagement, but the auditor should be prepared to justify departures from the suggested procedures. The auditor can consider the Supplement a safe harbor for identification of compliance requirements to be tested if the auditor performs reasonable procedures to ensure that the requirements in the Supplement are current. The grantor agency may elect to review audit working papers to determine that audit tests are adequate. B
2 I. PROGRAM OBJECTIVES Children s Health Insurance Program North Carolina s Title XXI program is to provide creditable health insurance coverage to uninsured low-income children who are residents of the state. The program is designed to be a vehicle to encourage parents to insure that every child in the state has access to an ongoing system of preventive health care. The program is designed to provide comprehensive health care coverage for children of working families who make too much to qualify for Medicaid (Title XIX) and too little to afford health insurance. The State s 100 County Division of Social Services (DSS) offices will act as single portal for the processing of all applications related to Health Choice. Applications for this program are also acceptable by mail or through county Public Health Agencies. II. PROGRAM PROCEDURES Activities Allowed or Unallowed: Who is eligible for N.C. Health Choice for Children? Family income determines eligibility--children must be a part of a family that makes less 200% of the federal poverty level amounts below (adjustable every April 1, according to March federal poverty level numbers): Family Size Annual Income Monthly Income 1 $20,420 $1,702 2 $27,380 $2,282 3 $34,340 $2,862 4 $41,300 $3,442 5 $48,260 $4,022 6 $55,220 $4,602 7 $62,180 $5,182 8 $69,140 $5,762 Each additional person in the family, add $567 per month. (These incomes are effective April 1, 2007.) Some allowances are made for child care costs and other work related expenses so those individuals who make slightly more than the limit should still consider checking into the program. What it costs? For those at the higher income levels under the table above, there will be an annual enrollment fee of $50 for one child and $100 for two or more children. For families under 150% of the federal poverty level (FPL) there is a co-payment for prescription drugs of $1 for generic drugs, $1 for a brand name without a generic available and $3 for a brand with a generic available. For families over 150% of federal poverty level (FPL) there will also be a co-payment levied of $5 per visit to a physician, dentist, optometrist, clinic, outpatient hospital visit, etc.; $1 for generic drugs, $1 for a brand name without a generic available, $10 for a brand with a generic available B
3 and $20 for non-emergency room visits. There will be no charge for anyone for well child and other preventive health visits. For families who make less than the amount listed on the table below (150% of the Federal Poverty Level), no enrollment fee will be charged. The income criteria are adjusted every April 1 according to the February federal poverty level. Family Size Annual Income Monthly Income 1 $15,315 $1,277 2 $20,535 $1,712 3 $25,755 $2,147 4 $30,975 $2,582 5 $36,195 $3,017 6 $41,415 $3,452 7 $46,635 $3,887 8 $51,855 $4,322 Each additional person in the family, add $425 per month. (These incomes are effective April 1, 2007.) Under federal rule, there are no out of pocket costs for federally recognized Native American children. What is covered? This is a comprehensive health insurance plan that covers not only hospitalization but also outpatient care. Preventive dental, vision and hearing benefits are available. The following is a summary of benefits: Hospital Care Semiprivate room, medications, laboratory texts, x-rays, surgeries, and professional care. Outpatient care includes diagnostic services, therapies, laboratory services, X-rays, and outpatient services. Physician and clinic services office visits; preventive services such as four well-baby visits up to one year of age, three visits per year between one and two years of age and one visit per year between 2 and 7, and once every three years between 7 and 19. Immunizations are covered. Surgical services includes standard surgical procedures, related services, surgeon s fees, and anesthesia. Prescription drugs Laboratory and radiology services Inpatient mental health services requires pre-certification Outpatient mental health services requires pre-certification after 26 outpatient visits per year. Durable medical equipment and supplies such as wheelchairs Vision No prior approval needed for one eye examination every 12 months, one set of glasses or contacts every 12 months. Prior approval needed for one set of frames every 24 months. Hearing Home health care limited to patients who are homebound and need care that can only be provided by licensed health care professionals or in the case that a physician certifies that the patient would other wise be confined to a hospital or skilled nursing facility. Professional health care is covered; care provided by an unlicensed caregiver is not covered. B
4 Nursing care Dental care includes oral examinations, teeth cleaning, and scaling twice during a 12-month period, full mouth X-rays once every 60 months, bitewing X-rays of the back teeth once during a 12 month period, sealants, simple extractions, therapeutic pulpotomies, prefabricated stainless steel crowns, and routine fillings of amalgam or other tooth colored filling material to restore diseased teeth. Inpatient substance abuse treatment and outpatient substance abuse treatment -is covered. See the Mental health inpatient and outpatient notes above. Physical therapy, occupational therapy and therapy for individuals with speech, hearing and language disorders Hospice care Special needs children with chronic mental or physical conditions or illness may receive services beyond those listed above if services are medically necessary and receive pre-certification. If at re-enrollment a child is found to be ineligible for the subsidized health insurance coverage because family income has increased above the 200% of the federal poverty level (FPL), an option is available. Should the family income exceed 200% of the federal poverty level (FPL) but not exceed 225% of the federal poverty level (FPL), the family will be offered the opportunity to purchase one additional year of coverage at the full premium price for each child. No subsidy is available for the extended coverage. Enrollment Process: Family may apply using mail-in applications to be found at county departments of social services and county health departments and on special displays at a variety of locations including grocery stores, pharmacies, and discount stores, human resources offices of major employers; through targeted outreach to public schools and day care centers; in person at specially designated outstations; and on the internet. In addition, the family may always apply at the local departments of social services and may obtain applications at specified medical providers, including Federally Qualified Health Centers (FQHC), Rural Health Centers (RHC), migrant health centers, Indian health centers and local health departments. Certain state agencies with frequent public contact such as drivers license and vehicle tag sites will also have mail-in application forms available. Enrollment Form: A self-completed simplified mail-in application form is used for families with children for both Title XIX and Title XXI. Forms in Spanish are available. Assistance in filling out the forms is available through local social services offices and at specially designated outstations. Enrollment Fee: Before they can be enrolled, a family enrollment fee of $50 for one child or $100 for two or more children must be paid to the County Division of Social Services for those families who fall between 150% and 200% of the federal poverty level (this fee is not required of federally recognized Native Americans). The enrollment fee will be kept by the local County DSS to help offset the administrative costs associated with eligibility determination. B
5 Eligibility Determination: County Division of Social Services evaluates whether there is Title XIX eligibility, obtain income verifications, and request any additional information if necessary. If the family is ineligible for Medicaid, then the family is assessed for North Carolina Health Choice (Title XXI) within the same time standard that is used for Title XIX applications (i.e. 45 days from the date of application.) Enrollment Method: County Division of Social Services enters enrollment information into statewide Eligibility Information System (EIS); the EIS sends eligibility updates to the State Employees Health Plan. EIS generates a notice of denial or approval for benefits for the applicant. The State Employees Health Plan sends out health identification cards, benefits booklets (in English and Spanish), etc. Enrollment Freeze: In the event that enrollments in the program exceed actuarial estimates of needed available dollars of the enrollment cap, administrators may halt new enrollments until such time as enrollment levels are administratively deemed to be within legislated parameters. The purpose of the plan is to limit enrollment in a manner that does not impose an extra burden on families to file multiple applications and it allows children to enroll as slots become available rather than waiting for a pre-established date. Should the family be an existing North Carolina Health Choice (NCHC) family and re-enroll during the 10-day grace period, the children will continue to have coverage. The initial closure will last a minimum of two months to allow the first full set of re-enrollments to have grace period and to build a safety buffer of open slots. Enrollments shall be permitted as follows: Families will continue to file applications and counties will determine eligibility as usual. If a child is determined eligible for Medicaid, then the application is approved and the child is issued benefits. If the child is determined ineligible for any program, application is denied. If the child qualifies for NC Health Choice, the application will be denied and the family will be notified that the child qualifies for the program but that no funds are available for the program. The state s Eligibility Information System will establish a computerized waiting list and add the child to the waiting list. Information about the child will not be transmitted to the claims processing agent until such time as the child is ready to be enrolled. Reactivation of applications from the waiting list: When the NC Division of Medical Assistance determines that it is possible to allow for new enrollees, it will notify the Division of Information Resources Management of the number of slots that can be filled. At the point of application a registration number will be filed so that the application can be sequenced chronologically according to the date originally registered in the Eligibility Information System. The application will be reactivated on a first-come, first-served basis according to this chronological order. When a child s application is reactivated, he or she is removed from the waiting list. The family is mailed notification that its application has been re-opened. The notification letter asks that the family confirm its address and uninsured status and is to be returned to the State. This permits the state to act on the family s behalf and reactivate the application. A maximum of 45 days processing time will be allowed for the application to be considered and for the family to provide any needed information. If the family does not return the reactivation notice the county checks agency records to see if an address change has occurred and will mail a second notice. The County Division of Social Services B
6 (DSS) acts on the returned notice to complete the application. The County DSS notifies the family if there is any enrollment fee due and the family is asked to pay it. The family is officially notified of the outcome of the reopened application and the child(ren) s record is transmitted to the claims processing agent. Benefits begin the month the application was reactivated and will continue for 12 consecutive months (e.g. the month of re-activation is month 1 of the 12 months). Should a family not reply within 45 days, the re-activated application is denied, the number of slots represented by the children in the family becomes available and the children do not return to the waiting list. The family can reapply at any time. In the event that the freeze is lifted, the backlogged wait-listed children must be enrolled in the program before the process returns to one with no waiting list. There was no waiting list implemented during SFY 2007 or calendar year Continuing Enrollment: Local outreach coalitions receive a kit of materials to assist in publicizing ongoing enrollment efforts. Local outreach coalitions will have administrative flexibility to use mail-in requests for the information, telephone follow up, and face-to-face interviews. Re-enrollment requirements and forms will be the same as initial enrollment process. For continued enrollment, form may be self-completed and mailed into the local DSS office. During the eleventh month following enrollment, individuals will be sent a copy of the mail-in application form with a reminder cover letter that it is time to apply to continue enrollment. In the event of an administrative freeze on new program enrollment, the outreach committee will design plans to specifically focus the efforts of county outreach coalitions on the frozen program. Focused attention will be given to improving retention and re-enrollment. The experience of the typical enrollee will be as follows: The family upon hearing about this opportunity and then receiving written material at their child s day care (or other source) fills out the application form and mails it to the preprinted address on the attached envelope. The local DSS worker assesses the form and makes one of three possible determinations (in this order): One, that the child is eligible for Title XIX. This information is data entered and the child is enrolled in Medicaid. Two, that the child is not eligible for Title XIX but is eligible for Title XXI, this information is data entered and sent to the Division of Medical Assistance, whereupon one of two things happens: 1) the child is enrolled in the Title XXI program upon receipt of an enrollment fee for families above 150% of poverty ($50 enrollment fee for one child and $100 fee for two or more children paid to the county Department of Social Services) and their information is forwarded to the TSECMMP for inclusion in the program, or 2) it is determined that the funds have been depleted and the child is denied. If the child is found eligible for either Title XIX or XXI and is enrolled, the family will receive by mail a card for the child and written instructions. In the case of Title XXI participants, the cover letter and card will be generated by State Employees Health Plan to welcome them to the program. The letter will inform the parent(s) how to access their children s providers including copays, out of pocket limits, etc. For children enrolled in the Title XXI program, during the eleventh month of eligibility the family will automatically receive a mail-in application form with a cover letter reminding the family that it is time for plan renewal. B
7 Three that the child is ineligible for both Title XIX and Title XXI, due to income the family is sent a denial letter. Local Department of Social Services (DSS) will identify potentially eligible families and facilitate the completion of applications. These efforts will include working with childcare providers and public schools to solicit their help in identifying eligible families and assisting them with the application process. There will be an annual enrollment fee for those above 150% of the federal poverty level (not exceeding 200% of poverty level) of $50 per child and $100 maximum for two or more children. Families below 150% of federal poverty level will pay co payments for prescriptions as follows: $1 for a generic drug, $1 for a brand name drug with no generic available, $3 for a brand with a generic available. Families above the 150% will pay copayments as follows: $1 for each generic drug, $1 for each brand drug with no generic available, or $10 for a brand with a generic available. Program Funds (Insurance Premiums) will be paid to State Employees Health Plan. Benefits and claims processing will be administered by the State Employees Health Plan with eligibility being determined by local departments of Social Service, and upon receipt of any applicable enrollment fee the information entered into the statewide Eligibility Information System (EIS). Through the Division of Medical Assistance (DMA), North Carolina Department of Health and Human Services (NCDHHS), EIS will forward Title XXI eligibility information to the State Employees Health Plan and will send notification of eligibility to families. The State Employees Health Plan will send families information about the Plan of Benefits and will process claims. III. COMPLIANCE REQUIREMENTS Crosscutting Since Health Choice administrative reimbursement is paid through the State Division of Social Services (DSS), procedures for evaluating fiscal reporting requirements should include review of DSS s county reimbursement form, the DSS-1571, and the DSS Fiscal Manual (which contains instructions for completion of the DSS-1571 and may be located at Local auditors should refer to the Division of Social Services Crosscutting section. A. Activities Allowed or Unallowed The Local Departments of Social Services act as the single portal for all Health Choice applications. Local DSS offices identify potentially eligible families and facilitate the completion of applications. Local DSS offices will collect enrollment fees on individuals who are eligible but are outside the income levels listed above. These fees will be used to offset administrative expenses incurred by the local DSS for eligibility determination. The State of North Carolina reimburses local DSS offices the remainder of the eligibility administrative cost incurred (Eligibility costs net of enrollment fees). Local DSS offices report their administrative costs on the State s Division of Social Services form 1571 and funds are reimbursed by the State s Division of Social Services. B
8 B. Allowable Costs/Cost Principles For costs to be allowable for reimbursement, they must be determined to be allowable in accordance with federal and State policy (see OMB Circular A-87 and North Carolina State Medicaid Plan). A copy of the OMB Circular is located at the Division of Medical Assistance Budget Office and in each County DSS office. The North Carolina Health Choice Plan can be located in the Division of Medical Assistance library and online at (For base plan benefits allowable costs see the State Employees Health Plan.) E. Eligibility for Individuals The State of North Carolina or its designee is required to determine client eligibility in accordance with eligibility requirements defined in the approved State application with HCFA. The designees for eligibility determination in North Carolina are the local Departments of Social Services. The Family and Children Medicaid Manual has the eligibility requirements for determining Health Choice eligibility. The Title XXI State Plan is on the web site, G. Matching, Level of Effort, Earmarking The Department of Health and Human Services provides limited federal and State funding to support the Health Choice administrative costs. There is no county matching requirement because DHHS pays the non-federal share. Each year the counties receive a Health Choice administrative allocation. If a county exceeds this allocation, the federal funds can be requested, if available, provided there are sufficient county funds to support the non-federal share. The State s contribution in general is approximately 25% of the total cost. State funds for this program come from the General Fund. B
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