Unless Texas Boosts Payment, Houston’s Largest CHIP Contractor Will End Participation in Program
Texas Children's Health Plan, which coves 48,000 children through the state's CHIP program, has told state officials that it will end its participation in the program unless premium rates are raised significantly, the Houston Chronicle reports. In a letter to the state Health and Human Services Commission giving the "required 90-day notice of termination," Mark Wallace, president and CEO of Texas Children's Hospital, which operates the not-for-profit health plan, wrote that the plan was suffering "staggering" losses under CHIP: $9.7 million to date and an anticipated $16 million more under the premium rates that the department has proposed for next year. Texas currently pays insurers who cover CHIP beneficiaries roughly $93 per child per month, and has proposed an increase to $108. According to a document prepared by Chris Born, president of Texas Children's Health Plan, while a state consultant recommends a $118 per child per month rate, the health plan proposes a rate of "nearly $152." "The rates currently being paid to Texas Children's Health Plan under its contract do not cover the medical costs of providing care to this population," Wallace wrote, adding, "Continuation in the CHIP program has driven the health plan into a financial crisis that cannot continue." According to Rep. Garnet Coleman (D), Texas Children's costs are "likely higher" than for other hospitals because it "serves very ill children with major health problems."
Will Children be Affected?
Under the terms of any pullout from the CHIP program, both sides have 90 days before the health plan's exit becomes effective. While Wallace wrote that Texas Children's is "concerned that it may take several months to find a new plan and providers for the children it currently serves," Charles Stuart, a spokesperson for the health commission, said, "If it is not resolved and they do choose to withdraw from the CHIP program, we will be moving to transition the children in their plan to other health plans. Children are not going to be without coverage, and I'm confident of that." He added that the state was negotiating a rate increase with the health plan. State health officials said that Texas Children's is the only health plan threatening to leave the CHIP program, which provides coverage for 400,000 children across the state (Hughes, Houston Chronicle, 8/23). For further information on state health policy in Texas, visit State Health Facts Online.
