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104TH CONGRESS

1ST SESSION H. R. 1502

To amend title XIX of the Social Security Act to prohibit a State from

requiring any child with special health care needs to receive services

under the State’s plan for medical assistance under such title through

enrollment with a capitated managed care plan until the State adopts

pediatric risk adjustment methodologies to take into account the costs

to capitated managed care plans of providing services to such children,

and to direct the Secretary of Health and Human Services to develop

model pediatric risk adjustment methodologies for such purpose.

IN THE HOUSE OF REPRESENTATIVES

APEIL 7, 1995

Mrs. LINCOLN introduced the following bill; which was referred to the

Committee on Commerce

A BILL

To amend title XIX of the Social Security Act to prohibit

a State from requiring any child with special health

care needs to receive services under the State’s plan

for medical assistance under such title through enrollment with a capitated managed care plan until the State

adopts pediatric risk adjustment methodologies to take

into account the costs to capitated managed care plans

of providing services to such children, and to direct the

Secretary of Health and Human Services to develop

model pediatric risk adjustment methodologies for such

purpose.
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1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Children’s Health

5 Equity Act of 1995’’.

6 SEC. 2. PROHIBITING STATE MEDICAID PLANS FROM RE7 QUIRING CHILDREN WITH SPECIAL HEALTH

8 CARE NEEDS TO ENROLL IN MANAGED CARE

9 PLANS.

10 (a) IN GENERAL.—Section 1903(m) of the Social Se11 curity Act (42 U.S.C. 1396b(m)) is amended by inserting

12 after paragraph (2) the following new paragraph:

13 ‘‘(3)(A) A State may not require a child with special

14 health care needs who is eligible to receive any medical

15 assistance under the State plan for any quarter to enroll

16 with a capitated managed care plan to receive such assist17 ance during the quarter, unless the State has adopted pe18 diatric risk adjustment methodologies under which the

19 State adjusts the payment rates for such plans to take

20 into account the financial risks of enrolling such children.

21 ‘‘(B) In this paragraph—

22 ‘‘(i) the term ‘capitated managed care plan’

23 means an entity which—

24 ‘‘(I) has a contract with the State agency

25 under which such entity is paid a fixed amount
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1 for providing or arranging for the provision of

2 health care items or services specified in such

3 contract to an individual eligible for medical as4 sistance under the State plan and enrolled with

5 such entity, regardless of whether such items or

6 services are furnished to such individual, and

7 ‘‘(II) is liable for all or part of the cost of

8 furnishing any of such items or services, re9 gardless of whether such cost exceeds such fixed

10 payment; and

11 ‘‘(i) the term ‘child with special health care

12 needs’ means any individual eligible for supplemental

13 security income under title XVI who is under 18

14 years of age, a child described under section

15 501(a)(1)(D), or a child described in section

16 1902(e)(3).’’.

17 (b) EFFECTIVE DATE.—The amendment made by

18 subsection (a) shall apply to quarters beginning on or

19 after the date of the enactment of this Act.
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1 SEC. 3. DEVELOPMENT OF MODEL PEDIATRIC RISK AD2 JUSTMENT METHODOLOGIES UNDER MEDIC3 AID TO TAKE INTO ACCOUNT ENROLLMENT

4 OF CHILDREN WITH SPECIAL HEALTH CARE

5 NEEDS IN MANAGED CARE PLANS.

6 (a) IN GENERAL.—The Secretary of Health and

7 Human Services, acting through the Administrator of the

8 Health Care Financing Administration, shall develop

9 model pediatric risk adjustment methodologies under sec10 tion 1903(m)(3) of the Social Security Act (as added by

11 section 2(a)) which State plans for medical assistance

12 under title XIX of such Act may use to adjust payment

13 rates for capitated managed care plans to take into ac14 count the financial risks to capitated managed care plans

15 of enrolling children with special health care needs.

16 (b) REPORT TO CONGRESS.—Not later than 2 years

17 after the date of the enactment of this Act, the Secretary

18 shall submit a report to Congress on the methodologies

19 developed under subsection (a) and on the feasibility of

20 applying the methodologies to State plans under title XIX

21 of the Social Security Act for purposes of section

22 1903(m)(3) of such Act.

23 (c) DEFINITIONS.—In this section, the terms

24 ‘‘capitated managed care plan’’ and ‘‘children with special

25 health care needs’’ have the meaning given such terms in
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1 section 1903(m)(3) of the Social Security Act (as added

2 by section 2(a)).

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