October 10, 2001
The Honorable Tommy G. Thompson Dear Secretary Thompson: Many States have done a commendable job linking their Children’s Health Insurance Portability (CHIP) and Medicaid programs to ensure seamless coverage for children. Others have not. At my request, the General Accounting Office (GAO) examined the implications of differences in enrollment and payment policies for children’s access to care. The GAO report, Medicaid and SCHIP: States’ Enrollment and Payment Policies Can Affect Children’s Access to Care, raises four principle problems caused by program policy differences. First, differing administrative requirements and procedures act as a barrier for children obtaining coverage and care. Poor coordination between CHIP and Medicaid offices is resulting in inappropriate denial, delay, or discontinuation of coverage. Often, it appears that it is children in Medicaid who are forced to meet additional requirements for enrollment. Second, provider networks vary between the programs. Plans that participate in CHIP do not necessarily participate in Medicaid and vice versa. States, however, were unable to identify which individual provider participated in which program. Changing providers as children transfer back and forth between the two programs can have serious repercussions for continuity of care -- particularly for those with special health care needs. Third, the GAO report reconfirmed a longstanding problem in Medicaid: low provider payments. The report found that Medicaid rates to physicians for children’s preventive services were significantly lower than the rates physicians were paid for the same services in CHIP. Unfortunately, this translates into reduced access to care for children in Medicaid as providers are less likely to participate when payment rates fall below the norm. Fourth, this report points out that cost-sharing requirements act as a barrier to maintaining coverage. Approximately ten percent of children enrolled in CHIP in California and Michigan lost coverage due to failure to pay a premium. Monthly income in many of these families fluctuates and can be unpredictable at times, meaning that cost-sharing requirements can act as an inappropriate barrier to needed care or to maintaining coverage. This last point calls into serious question the Administration’s recently announced Health Insurance Flexibility and Accountability (HIFA) waiver policy. This policy is premised on the notion that states can reduce benefits or increase cost sharing to certain low-income groups such as children, the disabled, or the elderly in order to cover other individuals. I applaud efforts to build on these successful programs to expand health insurance coverage. I believe, however, that new money is what is needed, not reductions in current benefits for children, the disabled or the elderly. GAO’s findings on the implications of premiums for maintaining coverage reinforce that point. All in all, this report is one of the first efforts to take a look at how differing requirements and payment rates in the Medicaid and CHIP programs can affect children’s access to health care services. Congress must work collaboratively with the States, the Centers for Medicare and Medicaid services, and groups representing beneficiaries to address these problems as quickly as possible. Please review the GAO’s findings and work with the Congress to find administrative and legislative solutions to the problems outlined in this report. It is unacceptable that artificial administrative requirements are preventing children from obtaining and maintaining health insurance coverage or health care services. We must do better and we must do better quickly, particularly as the economy declines and more children require these important programs for assistance. I appreciate your attention to these matters. Sincerely,
cc: The Honorable W. J. "Billy" Tauzin, Chairman The Honorable Michael Bilirakis, Chairman The Honorable Sherrod Brown, Ranking Member
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