Comments on the June 25, 2001 Revisions to the Regulations Implementing the State Children's Health Insurance Program

Subpart C-State Plan Requirements: Eligibility, Screening, Applications and Enrollment

§457.320 - Eligibility Standards
The interim final regulations modify the January rules by permitting states to require applicants to separate state child health programs to provide Social Security numbers (SSNs), but continue to specify that states may not require SSNs from parents or other family members who are not applying for health insurance benefits. We support the clarification that states may not require SSNs of non-applicants, but believe that giving states the option to require SSNs for separate child health programs is a poor interpretation of the law.We recommend that CMS revise the regulations at §457.320(b)(4) to the January version which specified that states could not require SSNs from any individual, whether the child or other family members. 

To accommodate the concern that SSNs may also deter Medicaid-eligible children from enrolling in coverage, we also recommend that §435.910(h) be amended so that states permit the use of a Medicaid identification number in lieu of SSNs for certain immigrants or children of immigrants applying for Medicaid, akin to the exception for religious reasons. Specifically, we recommend, at the end of the first sentence, inserting between "(SSN)" and the period, the following phrase: "or to an immigrant or child of an immigrant, who although otherwise eligible for benefits, would be unable to obtain an SSN on a timely basis". 

While we recommend that states not be permitted to require SSNs in separate state child health programs, if CMS elects to give states this option, then the provisions of §435.910(h) should be included for separate state child health programs as well, permitting the use of a "health identification number" in lieu of an SSN.

Explanation
We appreciate the regulatory clarification in the interim final regulation that states cannot require the submission of SSNs by family members who are not applying for benefits themselves. However, we feel that the January rules were a more appropriate interpretation of existing federal law and represented a carefully crafted policy that tried to balance divergent concerns.
From a policy perspective, the issue of requiring SSNs is complicated. On one hand, as the preamble notes, the difference in Medicaid and SCHIP policies relating to SSN requirements may make it harder for states to promptly conduct screen and enroll processes and to coordinate joint eligibility determinations. The lack of SSNs could delay the processing of children's applications and increase the risk that some fall through the cracks. On the other hand, studies indicate that a disproportionate share of eligible immigrant families do not apply for child health insurance and documentation requirements may create additional barriers for this underserved population. Letting states request SSNs on a voluntary basis seems like a reasonable trade-off between these conflicting policy objectives.The proposed change appears to be based on a new interpretation of the Privacy Act, specifically a section that lets states require SSNs for "general public assistance programs." Under its new interpretation, HHS believes that SCHIP can be considered such a program. We believe that this is not the correct interpretation and that SCHIP should not be considered a general public assistance program for this purpose. SCHIP is a federal child health assistance program that does not provide general benefits, but a specified set of insurance and child health services to a specified population.

We are particularly concerned about certain groups of immigrant children who are eligible for federally-funded SCHIP and Medicaid services, but may not be eligible for SSNs or may have great difficulty obtaining them. These include children in families of victims of domestic abuse (under the Violence Against Women Act), certain Cuban-Haitian entrants or certain asylees. These qualified immigrants are lawfully present in the United States, but may not be authorized for work, which greatly complicates the process of getting a SSN. Many of these immigrants ought to be able to obtain "non-work" SSNs if required as a condition of gaining access to federal benefits, but procedural complications are common and it is often difficult to get such SSNs on a timely basis. It would be a major failing of child health programs if eligible immigrant children, who often have suffered greatly before coming to the United States, are denied program eligibility simply because of administrative problems in getting a SSN. 

In light of the particular barriers to securing a SSN faced by many immigrant families, we recommend that CMS modify the Medicaid SSN requirement to allow for a good cause exception for immigrant families. There is already an exception to the SSN requirement in Medicaid for people who do not want to apply for SSNs for religious reasons and it should be possible to make similar exceptions for immigrant families. Under the proposed exception, states could assign a Medicaid identification number, unrelated to any SSN, for programmatic purposes. Similarly, while we do not believe that a correct interpretation of the Privacy Act allows states to require SSNs in separate child health programs, if the final rule nevertheless does give states the option to require SSNs, the regulations also should establish exceptions for immigrant families under separate child health programs. 

Related to this, we applaud the effort to include protections regarding the use of SSNs in the SCHIP regulations at §457.340(b) by incorporating references from Medicaid rules at §435.910. However, we suggest that in the interests of clarity, it would be preferable to actually restate the requirements of §435.910 (b), (e), (f) and (g) in the SCHIP regulations. (These provisions describe requirements that states assist applicants without a SSN in securing a SSN, and that they provide coverage during the period in which the applicant is securing the SSN.)

§457.350 - Eligibility Screening and Facilitation of Medicaid Enrollment
The revised regulation eliminates §457.350(f)(5)(3), which would have assured that children cannot be required to submit a second, duplicate application for coverage after being bounced back and forth between a separate SCHIP program and Medicaid. We recommend that HHS restore the original provision (§457.350 (f)(5)(3)(iii)) to minimize the possibility of eligible children falling through the cracks and missing out on coverage, as required by the coordination requirements of the SCHIP statute. As written in the regulations issued January 11, 2001, the rule allows states to gather information needed to account for changes in a family's circumstances, but prohibits states from requiring children submit a second, duplicate application for coverage after being bounced back and forth between a separate SCHIP program and Medicaid.

Explanation

Most states with separate SCHIP programs use a joint application process that allows a family to apply simultaneously for coverage under Medicaid and a separate SCHIP program. Under these application procedures, children cannot apply for coverage under the "wrong" program because the state's procedures evaluate the children's eligibility for both Medicaid and a separate SCHIP program at the same time. However, a select number of states instead rely on a "sequential" application process under which a child can be found ineligible for a separate state program based on a screen showing eligibility for Medicaid and then be sent to Medicaid for an evaluation. If the child turns out not to be eligible for Medicaid, he or she is sent back to the SCHIP program for another evaluation.

To assure that children in states with sequential application procedures are not required to file a new application after being bounced between a separate SCHIP program and Medicaid, §457.350 (f)(5)(3)(iii) of the original regulation prohibited states from requiring children in such circumstances to file a new application for the separate SCHIP program. Although it did not allow states to require families to start the application process anew after being bounced between programs, §457.350(f)(5)(3)(iii) did allow states to collect supplemental information needed to account for changes in the child's circumstances that might affect eligibility. 

If states do not adopt procedures to coordinate Medicaid and separate SCHIP programs, children who are eligible for publicly-funded coverage are at significant risk of falling through the cracks and remaining uninsured. Congress clearly recognized the importance of coordination between Medicaid and SCHIP when writing the SCHIP statute and in four different places included provisions designed to promote coordination of coverage. (HHS has also recognized the importance of coordination as evidence by its July 7th, 2000 letter to state officials on SCHIP waivers that indicated the agency would consider requests to use SCHIP funds for parents only in states that had developed strong coordination procedures.) It is difficult to imagine how a state could be in compliance with the requirements to coordinate coverage established by Title XXI if a child must submit a second, duplicate application for coverage after being bounced back and forth between a separate SCHIP program and Medicaid. 

In explaining why it dropped the prohibition on requiring families to submit duplicate applications, HCFA maintained that there might be circumstances under which a new application would be warranted, arguing "for example, considerable time may elapse following the initial application, for reasons beyond the State's control, and information on the application may no longer be valid." We, however, do not believe it is necessary to require a child to submit a second, duplicate application to address the concern that a family's circumstances might have changed since filing its initial application. Indeed, the final regulation issued January 11, 2001 specifically envisioned such a scenario and addressed it by giving states the option to request supplemental information needed to account for changes in a child's circumstances.

§ 457.355 - Presumptive Eligibility
The interim final regulations modify the interpretation of coverage under and accounting for presumptive eligibility, such that children who are covered during a period of presumptive eligibility in accordance with §435.1102 and newborns enrolled in separate state child health programs can be covered with Title XXI funds. The cost of covering children in separate SCHIP programs on a presumptive eligibility basis would be eligible for the enhanced federal match rate, and would not be counted against the 10 percent limit. 

We support the Department's modification and believe it will encourage states to make more effective use of presumptive eligibility provisions and help ensure that children receive insurance coverage on a timely basis.

Explanation
The modification in the interim final regulations appears to correct a technical error in the description of states' accounting options for presumptive eligibility costs associated with children enrolled in separate SCHIP programs. We believe that the interim final regulations is correct, as well as important to encouraging states to make more effective use of the presumptive eligibility option in SCHIP.

Subpart D-Secretary-Approved Coverage 
§457.450(b) - §1115 Waiver Benefits
The revised regulation automatically deems any benefits package approved under any §1115 Medicaid waiver as Secretary-approved coverage under SCHIP. This revision reverses the policy as published in the January 11, 2001 regulation that would only have allowed automatic approval of §1115 waiver packages that also include the Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) benefit or that apply to the entire Medicaid population in a state. Benefits packages not meeting these standards would require affirmative approval by the Secretary. The revised §457.450(c) would also automatically approve coverage that includes the EPSDT benefit or that is extended to all Medicaid beneficiaries in the state as Secretary-approved for SCHIP. 

We recommend that CMS restore §457.450(b) as written in the final regulation issued January 11, 2001, that only allows automatic Secretarial-approval for benefits packages in approved §1115 waivers to be considered appropriate child health coverage in SCHIP if the package either includes the EPSDT benefit or is the benefit package offered to the state's entire Medicaid population.

We also recommend that the preamble to the final regulations clarify that a state can have a benefit package offered under a Medicaid §1115 waiver deemed to meet the definition of "Secretary-approved coverage" only if the state's own §1115 waiver program uses the benefit package. We believe that this is what was intended by the policy outlined in the interim final regulations, but the regulatory language could be interpreted to mean that a benefit package offered in one state under a §1115 waiver can be imported to another state without any state-specific review or Secretary oversight, irrespective of whether it includes EPSDT or is statewide.

Explanation

§1115 Medicaid demonstration waivers are experimental demonstration projects which, in the judgment of the Secretary, are likely to promote the objectives of the Medicaid statute. Given that demonstration projects operated under waivers represent a departure from what is allowed under federal law, it is important that they be subject to rigorous standards of review and not be replicated on an unfettered basis. The public should have the opportunity to be involved in the process of developing waiver projects; projects should be of limited duration and subject to evaluation; and states that operate waivers should be required to do so under an agreed upon set of terms and conditions that guide implementation of the waiver. 

The proposal in the June 25, 2001 interim final rule eliminates the procedural and substantive protections for beneficiaries under the current waiver approval process. It also suggests that there is an unlimited opportunity for every state to replicate other states' §1115 program benefit packages, even if they do not include EPSDT or are applied statewide. It creates a new opportunity for replication of waiver programs that do not offer the full benefits package otherwise available to children without appropriate scrutiny. Instead of evaluating waiver proposals on a state-by-state basis as it should, HHS now leaves open the possibility of unrestricted importing of waiver policies from one state to another, creating the risk that children will miss out on important health care benefits without public input or Secretary review, oversight, and evaluation. 

Under §457.450(b) of the January 11, 2001 final rule to be considered Secretary-approved, §1115 benefits packages would have to include the Early and Periodic Screening, Diagnosis, and Treatment (EPSDT) benefit or have been extended to the entire Medicaid population in the State.

§457.450(e) - Existing State-Based Coverage
The revised §457.450(e) would deem as "Secretary-approved" the coverage provided by Florida, New York, and Pennsylvania under their state-based program as they existed when the SCHIP statute was passed in 1997. The consequence of the provision is that any state can adopt the benefits package in place in any of these three states in 1997 without a state-specific review of the appropriateness of the coverage for the state's children. We believe it is clear that the statutory provision allowing approval of the benefits package in Florida, New York, and Pennsylvania to qualify as SCHIP coverage was intended solely for these states, and that Congress did not intend for the "Secretary-approved" coverage option to create a backdoor mechanism for applying the exception to other states on a wholesale basis. By allowing other states to adopt such packages without a state-specific review, children enrolled in SCHIP could miss out on important services.

We recommend that CMS restore §457.450(e) as written in the final regulations issued on January 11, 2001.

Explanation

§457.495 - Prior Authorization Decisions
The revision to §457.495 allows states to opt out of the requirement to make prior authorization of services decisions in accordance with the medical needs of the patient and within a specific time frame if there is an existing state law that governs prior authorization decisions. The regulation issued on January 11, 2001 required that decisions related to prior authorization of health services be completed either in accordance with the medical needs of the patient, or within 14 days after the service is requested, with the possibility of an extension of up to 14 days if the enrollee requests it or if the health plan or physician determines that additional information is needed. We recommend that CMS restore §457.495(d) as written in the final regulations issued on January 11, 2001, which require that prior authorization decisions are made in accordance with the medical needs of the patient within the time frame established in §457.495(d)(1), and only allow states to follow an existing state law if it is the same as §457.495(d)(1) or has shorter time frames.

Explanation

We believe that prior authorization of services should be done in accordance with the medical needs of the patient. We see no reason that states should not be able to assure that prior authorizations be completed within 14 days at the most, where the physician and health plan do not need additional information. Indeed, this requirement is very close to DOL regulations issued November 21, 2000 for ERISA plans, which require that plans complete a prior authorization decision within 15 days after the receipt of a request for services. Because plans are already modifying their policies for self-insured clients, they should be able to easily adapt this requirement for their SCHIP clients.

Because some states do have shorter prior authorization time frames that those in §457.495(d)(1), we think that CMS could make clear that where State laws meet the requirements of §457.495(d)(1) or have shorter time frames for decisions or requirements regarding urgent care authorization, states can use an existing State law.CMS argues that it is necessary for the adoption of premium assistance programs to allow States to opt to use an existing state law regarding prior authorization. We believe that there is no reason to reduce the protections for all children enrolled in state child health programs because some states wish to deliver health services to certain children through a premium assistance program. We also believe that there is no reason to allow reduced protections for children enrolled in premium assistance programs as compared to other SCHIP-eligible children simply because they receive services from a group health plan. It is appropriate for CMS to establish minimum requirements for State child health programs to ensure that children receive services they need in a timely manner

Subpart E-State Plan Requirements: Enrollee Financial Responsibilities
§457.560(a) - Cumulative Cost-sharing Maximum
The revised rules eliminate §457.560(a) of the January 11, 2001 final rule requiring states to count cost-sharing amounts that a family has a legal obligation to pay in computing whether the family has met the cumulative cost-sharing maximum. The January 11, 2001 final rule recognized that families could incur cost-sharing obligations that if accrued could exceed the cost-sharing limitations required by the Balanced Budget Act of 1997. Thus, the January 11, 2001 final rule counted accrued cost-sharing obligations that were legal obligations to pay toward the annual cost-sharing maximum. The revision addresses a potential problem with the January rule, but at the cost of creating a new potential barrier to families' access to health care.

Any final rule should restore §457.560(a) as written in the final regulation issued on January 11, 2001 that required states to count cost-sharing amounts that a family has a legal obligation to pay in computing whether the family has met the cumulative cost-sharing maximum, and also include a provision that states ensure that a combination of the family's legal obligations and actual cost-sharing never exceed the cumulative cost-sharing maximum in that year.

§456.560(b) - Cost-sharing Limits for Families Below 150% of Poverty
The revised regulation eliminates §457.560(b) of the January 11, 2001 final rule limiting cost-sharing for families at or below 150 percent of the federal poverty level (FPL) to 2.5 percent of family income, and revises §457.560(c) to limit cost-sharing to 5 percent of family income for all enrollees in the program. To protect low-income children from missing out on coverage or services that they need as a result of overly-burdensome cost-sharing obligations, we recommend that §457.560(b) be restored as written in the final regulation issued on January 11, 2001.

Explanation

In writing the SCHIP statute, Congress clearly envisioned that states would need to apply a special degree of restraint in imposing premiums and cost-sharing on families with income below 150 percent of poverty. To this end, it imposed the requirement that premium and cost-sharing obligations for such families be "nominal," while it required that families above 150 percent of poverty be protected by the more generic requirement that their premium and cost-sharing obligations could not exceed five percent of family income. It also specifically stated that states should assure that children in lower-income families are served before children in higher income families.

§457.560(b) of the January 11, 2001 final rule met these congressional goals by limiting the cumulative cost-sharing obligations of families at or below 150 percent of the federal poverty level to 2.5 percent of family income. The provision had the salutary effect of recognizing that some families with income below 150 percent of poverty with several children or with one or more children with special health care needs will not be sufficiently protected by the requirement that their premiums and cost-sharing obligations be "nominal." In these families, multiple cost-sharing obligations coupled with premium or enrollment fees could add up to a significant share of income, making access to health care for their children financially difficult. 

It is worth clarifying the impact of the revised regulation by presenting an example. Under the January rules, a family of four whose income is at the poverty line would have a cost-sharing limit of 2.5 percent of family income or $441 per year. Under the interim revised rules, this would double to 5 percent or $883 per year. Such a change selectively harms poorer families, since it only applies to families with incomes below 150 percent of poverty. Since it would primarily affect co-payments, the effects will primarily target children with special health needs and those with chronic health problems. While we sympathize with the need for state flexibility, we cannot understand why the Administration would want to make a change that could increase expenses for the poorest, sickest children by several hundred dollars per year. 

Although CMS has stated that maintaining the 2.5 percent cap on families below 150 percent of poverty imposes too cumbersome a burden on states, this argument is specious for two reasons. First, the interim final regulations require states to maintain a 5 percent cap for families below 150 percent of the poverty line, and there is no reason why the level at which a cap is set (i.e., 2.5 percent versus 5 percent) should significantly affect the amount of administrative work associated with implementing the cap. Second, states can impose on families the responsibility for documenting and keeping track of their out-of-pocket expenses in order to evaluate whether they have reached the cap, regardless of whether it is set at 2.5 percent or 5 percent.

Preamble - Discussion of Cost-Sharing

We recommend that the policy as written in the final regulations issued January 11, 2001 be re-instituted.

Explanation

The January 11, 2001 final rule recognized that the purpose of the program was to provide health care to targeted uninsured children. Although we support the efforts of states to secure coverage that applies to the parents in a family, as well as their children, we are concerned that family coverage not inadvertently cause children to miss out on coverage. By allowing family-based premium and cost-sharing obligations to exceed 5 percent, the June 25, 2001 interim final rule sets up a scenario that puts children at risk of not getting the health care they need. The reality is that it is the overall burden placed on the family as a unit of meeting premium and cost-sharing obligations that will determine whether it can afford to secure adequate coverage for the children in the family. It makes little difference to a family struggling to meet cost-sharing requirements on behalf of a child in need of care if the reason for the difficulty is attributable to the payments it already has made on behalf of the children versus the adults in the family. The result remains the same - the child is at risk of going without needed services.

For example, consider a family in which the mother required extensive treatment for an illness at the beginning of the calendar year. Later in the year, after the family already has spent limited financial resources on meeting its cost-sharing obligations for the mother's care, the children in the family become sick and need care. It makes no difference to the family's ability to secure care for the children that its available resources have been depleted by the cost-sharing associated with the mother's illness rather than an earlier illness of the children -- the family simply may not be able to afford to secure care for its children. As now drafted, the interim final regulations could mean that SCHIP premium and cost-sharing rules are applied in a way that causes children to miss out on health care even though the purpose of the SCHIP program is to assure that children receive comprehensive health care benefits.

Moreover, it is technically difficult to fairly disaggregate children's vs. adult's costs when the entire family is covered, creating the potential for gaming. For example, if the employee share of insurance premiums is $100 for a family, how much is the child-related cost? There are several ways to calculate this and without extensive federal guidance the determination may be inequitably applied from family-to-family or state-to-state. Similarly, in indemnity policies, coverage might only begin after one person meets a $500 deductible. Should this deductible be considered an adult's costs or the child's? The revised rule makes the determination of cost-effectiveness more vulnerable to arbitrary decisions in allocating expected costs between children and adults.

Subpart G-Strategic Planning, Reporting, and Evaluation
§457.750 - Reporting Primary Language
The interim final rule eliminates the requirement that states annually report the primary language of enrollees, but maintains separate requirements for annual reporting about the race, ethnicity and gender of enrollees. This may reduce the extent to which states collect and review data about primary language and reduce the ability of state and local agencies to target outreach, enrollment, retention and service improvement efforts to underrepresented groups. The rule notes that it may be more useful to collect data about the primary language of the head of household and that states should have flexibility in how to collect this information. We recommend that §457.750(b)(7) be restored but modified. The annual reports should include information about the primary language of enrollees or, as appropriate, their parents, guardians or caretakers. This provides flexibility to states, but preserves a general obligation to report about primary language and to ensure that language gaps do not create unnecessary barriers to children's health care coverage.

Explanation

It is well known and well documented that language barriers are a serious impediment to enrolling Latino, Asian and other ethnic children in child health insurance programs and to communicating with their families about program rules and how to use the medical services. Without knowing the primary language, it is difficult to develop and target outreach, enrollment, education, and health care materials and services that are appropriate for each community. These data are useful not only to state and local agencies administering the programs, but to health plans and health care providers who serve them. Federal civil rights policy clearly enunciates the importance of providing access to people with limited English proficiency. 

Without a requirement that each state provide annual data on primary language, many states may not collect, analyze or report these data. Without a reporting requirement, it will be impossible to determine whether agencies are doing a better job in meeting the needs of under represented ethnic populations. 

We acknowledge CMS' comment that it may be more appropriate to consider the primary language of the parent, guardian or other caretaker of the child, rather than the enrollee him- or herself. In most cases, this would be a more appropriate language standard, since the parent usually acts on behalf of the child. However, in some cases, such as adolescents, the child may be the primary point of contact. CMS need not eliminate the primary language reporting requirement to address this concern; instead it could simply provide states with the option to report on the primary language of the adult applying on behalf of the child or the child, as its policy preferences and needs dictate.

Subpart K-State Plan Requirements: Applicant and Enrollee Protections
General Comments on Subpart K
§§ 457.1120-457.1190 - Applicant and Enrollee Protections
As written in the regulations issued January 11, 2001, §§457.1120-457.1190 were intended to establish minimum standards for review processes designed by states for enrollees in the SCHIP program. The rule did not dictate that a particular process be used by states, but rather ensured that any process the state devised would contain certain minimum protections for enrollees. The revised rule eliminates the minimum standard in favor of allowing states to use a review process already in place in the state, regardless of whether it meets the minimum requirements of §§457.1130-457.1180 as written in the regulations issued January 11, 2001. We recommend that §§457.1120-457.1190 be restored as written in the final regulations issued January 11, 2001, requiring that states provide enrollees access to a review process that meets minimum standards.

Explanation

We strongly believe that the original regulation provided adequate state flexibility to design a review process, and that the importance of providing adequate consumer protections to all SCHIP enrollees outweighs the concerns expressed in the revised rules regarding the administrative burden on states or health plans not participating in child health programs. We agree with CMS's explanation in the rule published on January 11, 2001 (66 FR 2634) that the agency is accorded the authority to set minimum requirements for ensuring that all children eligible for and enrolled in SCHIP are provided health coverage and services "in an effective and efficient manner." Where state insurance laws meet or exceed the requirements of §§457.1130-457.1180, there should be little or no added administrative burden on states to meet these requirements, and health plans should have little or no disincentive for participating in SCHIP related to these provisions. Where state laws do not meet the requirements of §§457.1130-457.1180, it is incumbent upon CMS to assure that children enrolled in SCHIP be guaranteed appropriate review for disputes related to their eligibility, enrollment, and access to health services. 

State-specific laws governing private health insurance issuers were not designed with the SCHIP population in mind, and may not be adequate to serve the needs of these low-income families. A state's general insurance review process is presumably designed for controlling services in an open marketplace with relatively knowledgeable consumers, but it is unlikely to be properly tailored to the needs of the SCHIP population, which is by definition disproportionately poor and therefore likely to have lower education, and perhaps literacy, levels. Congress enacted SCHIP to provide health insurance to children who have no other way to get such coverage. The minimum requirements enumerated in §§457.1130-457.1190 assure that children in every state are accorded the same degree of protection, and that no child applying for or enrolled in SCHIP goes without needed benefits when there is a dispute regarding eligibility, enrollment or health services.

Comments on Specific Sections of Subpart K

§457.1130 - The preamble at 66 FR 33818 of the revised regulation indicates that States must have a process for review of all of the matters listed in §457.1130. However, the revised rule indicates that this section does not apply to states that opt to utilize a process in an existing state law as defined in §457.1120(a)(2) rather than developing a SCHIP review process. In order to ensure that States provide review of all matters listed in this section, §457.1130 should be restored as written in the final regulations issued January 11, 2001.
§457.1150 - At 66 FR 33817, CMS indicates that it expects states will have an independent external appeal process for health services matters. However, not all states include an external review in their grievance and appeal law. A May 2000 study found that even states that do have external review policies are increasingly likely to have policies that can prevent consumers from gaining access to those reviews. Policies such as filing fees, filing deadlines, claims thresholds, and limitations on the kind of health service denial that are eligible for reviews are especially likely to keep SCHIP-eligible families from utilizing an external review process. For example, New York, Oklahoma, and Virginia charge a filing fee of $50, which would pose a significant barrier for low-income families. Georgia, Ohio, Tennessee, and Virginia impose a claims threshold of $500, which means that children in SCHIP-eligible families would be unable to get an external review for delays or denials of many of the services that children need. In order to ensure that all SCHIP enrollees have access to an external appeals process, §457.1140 should be restored as written in the final regulations issued January 11, 2001.
§457.1160 - State health insurance laws that allow longer time frames for review than those described in §457.1160 can be especially problematic for SCHIP-eligible children. Families with children eligible for separate child health programs by definition do not have the resources to pay privately for a disputed health service and seek reimbursement through the review process. We recommend that §457.1160 should be restored as written in the final regulations issued January 11, 2001.§457.1170 - State health insurance laws are unlikely to address the issue of continuing enrollment during disputes related to eligibility and enrollment, including decisions to disenroll for failure to pay cost-sharing (as specified in §457.1170). This provision is especially important for SCHIP-eligible families who have no other access to health care outside of the separate child health insurance plan. We recommend that §457.1170 be restored as written in the final regulations issued January 11, 2001.
§457.1180 - This section requires states to ensure that the review process provides timely written notice to families of health care and coverage decisions that are subject to review, along with information about their rights to review that matter, the time frames for review, how to request a review, and how to continue coverage pending the outcome of the review. It is particularly important for participants in public programs to receive understandable and timely notice of decisions, and of their rights to review. Some state laws do not require that plans provide notice of external appeal rights until consumers exhaust the internal appeals process. Because state laws are inconsistent and not designed with the SCHIP population in mind, it is important that CMS continue to require that SCHIP applicants and enrollees are provided with notice as described in §457.1180. We recommend that §457.1180 be restored as written in the final regulations issued January 11, 2001.
§457.1190 - This section originally provided that in states that operate a premium assistance program to purchase group health insurance for SCHIP-eligible children or families that does not meet the requirements in §§457.1130(b), 457.1140, 457.1150(b), 457.1160(b), and 457.1180, that the state provide enrollees an opportunity to enroll in health coverage other than that group plan. The state must offer this opportunity when the family initially enrolls as well as at subsequent eligibility redeterminations. The revised section eliminates the section numbers listed and instead requires states to allow applicants and enrollees the option of enrolling in coverage other than the group plan if that group plan does not meet the requirements of "a program specific review or a Statewide standard review, as described in §457.1120." 

Children who receive health services through group health plans via a premium assistance program should be entitled to the same minimum protections described in §§457.1130-457.1180 as other children enrolled in SCHIP. The fact that states have substantially less oversight of such group health plans should be a reason that CMS require enhanced right to review of decisions that may delay or deny health services to children enrolled in such plans. We recommend that §457.1190 be restored as written in the final regulations issued January 11, 2001.