42 C.F.R. Subpart D—State Plan Requirements: Coverage and Benefits
Title 42 - Public Health
Source: 66 FR 2678, Jan. 11, 2001, unless otherwise noted.
(a) Statutory basis. This subpart interprets and implements— (1) Section 2102(a)(7) of the Act, which requires that States make assurances relating to, the quality and appropriateness of care, and access to covered services; (2) Section 2103 of the Act, which outlines coverage requirements for children's health insurance; (3) Section 2109 of the Act, which describes the relation of the SCHIP program to other laws; (4) Section 2110(a) of the Act, which describes child health assistance; and (5) Section 2110(c) of the Act, which contains definitions applicable to this subpart. (b) Scope. This subpart sets forth requirements for health benefits coverage and child health assistance under a separate child health plan. (c) Applicability. The requirements of this subpart apply to child health assistance provided under a separate child health program and do not apply to a Medicaid expansion program. For the purpose of this subpart, the term “child health assistance” means payment for part or all of the cost of health benefits coverage provided to targeted low-income children for the following services: (a) Inpatient hospital services. (b) Outpatient hospital services. (c) Physician services. (d) Surgical services. (e) Clinic services (including health center services) and other ambulatory health care services. (f) Prescription drugs and biologicals and the administration of these drugs and biologicals, only if these drugs and biologicals are not furnished for the purpose of causing, or assisting in causing, the death, suicide, euthanasia, or mercy killing of a person. (g) Over-the-counter medications. (h) Laboratory and radiological services. (i) Prenatal care and pre-pregnancy family planning services and supplies. (j) Inpatient mental health services, other than services described in paragraph (r) of this section but including services furnished in a State-operated mental hospital and including residential or other 24-hour therapeutically planned structured services. (k) Outpatient mental health services, other than services described in paragraph (s) of this section but including services furnished in a State-operated mental hospital and including community-based services. (l) Durable medical equipment and other medically-related or remedial devices (such as prosthetic devices, implants, eyeglasses, hearing aids, dental devices and adaptive devices). (m) Disposable medical supplies. (n) Home and community-based health care services and related supportive services (such as home health nursing services, personal care, assistance with activities of daily living, chore services, day care services, respite care services, training for family members and minor modification to the home.) (o) Nursing care services (such as nurse practitioner services, nurse midwife services, advanced practice nurse services, private duty nursing, pediatric nurse services and respiratory care services) in a home, school, or other setting. (p) Abortion only if necessary to save the life of the mother or if the pregnancy is the result of rape or incest. (q) Dental services. (r) Inpatient substance abuse treatment services and residential substance abuse treatment services. (s) Outpatient substance abuse treatment services. (t) Case management services. (u) Care coordination services. (v) Physical therapy, occupational therapy, and services for individuals with speech, hearing and language disorders. (w) Hospice care. (x) Any other medical, diagnostic, screening, preventive, restorative, remedial, therapeutic, or rehabilitative services (whether in a facility, home, school, or other setting) if recognized by State law and only if the service is— (1) Prescribed by or furnished by a physician or other licensed or registered practitioner within the scope of practice as defined by State law; (2) Performed under the general supervision or at the direction of a physician; or (3) Furnished by a health care facility that is operated by a State or local government or is licensed under State law and operating within the scope of the license. (y) Premiums for private health care insurance coverage. (z) Medical transportation. (aa) Enabling services (such as transportation, translation, and outreach services) only if designed to increase the accessibility of primary and preventive health care services for eligible low-income individuals. (bb) Any other health care services or items specified by the Secretary and not excluded under this subchapter. (a) Types of health benefits coverage. States may choose to obtain any of the following four types of health benefits coverage: (1) Benchmark coverage in accordance with §457.420. (2) Benchmark-equivalent coverage in accordance with §457.430. (3) Existing comprehensive State-based coverage in accordance with §457.440. (4) Secretary-approved coverage in accordance with §457.450. (b) Required coverage. Regardless of the type of health benefits coverage, described at paragraph (a) of this section, that the State chooses to obtain, the State must obtain coverage for— (1) Well-baby and well-child care services as defined by the State; (2) Age-appropriate immunizations in accordance with the recommendations of the Advisory Committee on Immunization Practices (ACIP); and (3) Emergency services as defined in §457.10. Benchmark coverage is health benefits coverage that is substantially equal to the health benefits coverage in one of the following benefit plans: (a) Federal Employees Health Benefit Plan (FEHBP). The standard Blue Cross/Blue Shield preferred provider option service benefit plan that is described in, and offered to Federal employees under, 5 U.S.C. 8903(1). (b) State employee plan. A health benefits plan that is offered and generally available to State employees in the State. (c) Health maintenance organization (HMO) plan. A health insurance coverage plan that is offered through an HMO (as defined in section 2791(b)(3) of the Public Health Service Act) and has the largest insured commercial, non-Medicaid enrollment in the State. (a) Aggregate actuarial value. Benchmark-equivalent coverage is health benefits coverage that has an aggregate actuarial value determined in accordance with §457.431 that is at least actuarially equivalent to the coverage under one of the benchmark packages specified in §457.420. (b) Required coverage. In addition to the coverage required under §457.410(b), benchmark-equivalent health benefits coverage must include coverage for the following categories of services: (1) Inpatient and outpatient hospital services. (2) Physicians' surgical and medical services. (3) Laboratory and x-ray services. (c) Additional coverage. (1) In addition to the categories of services in paragraph (b) of this section, benchmark-equivalent coverage may include coverage for any additional services specified in §457.402. (2) If the benchmark coverage package used by the State for purposes of comparison in establishing the aggregate actuarial value of the benchmark-equivalent coverage package includes coverage for prescription drugs, mental health services, vision services or hearing services, then the actuarial value of the coverage for each of these categories of service in the benchmark-equivalent coverage package must be at least 75 percent of the value of the coverage for such a category or service in the benchmark plan used for comparison by the State. (3) If the benchmark coverage package does not cover one of the categories of services in paragraph (c)(2) of this section, then the benchmark-equivalent coverage package may, but is not required to, include coverage for that category of service. (a) To obtain approval for benchmark-equivalent health benefits coverage described under §457.430, the State must submit to CMS an actuarial report that contains an actuarial opinion that the health benefits coverage meets the actuarial requirements under §457.430. The report must also specify the benchmark coverage used for comparison. (b) The actuarial report must state that it was prepared— (1) By an individual who is a member of the American Academy of Actuaries; (2) Using generally accepted actuarial principles and methodologies of the American Academy of Actuaries; (3) Using a standardized set of utilization and price factors; (4) Using a standardized population that is representative of privately insured children of the age of those expected to be covered under the State plan; (5) Applying the same principles and factors in comparing the value of different coverage (or categories of services); (6) Without taking into account any differences in coverage based on the method of delivery or means of cost control or utilization used; and (7) Taking into account the ability of a State to reduce benefits by considering the increase in actuarial value of health benefits coverage offered under the State plan that results from the limitations on cost sharing (with the exception of premiums) under that coverage. (c) The actuary who prepares the opinion must select and specify the standardized set and population to be used under paragraphs (b)(3) and (b)(4) of this section. (d) The State must provide sufficient detail to explain the basis of the methodologies used to estimate the actuarial value or, if requested by CMS, to replicate the State's result. (a) General requirements. Existing comprehensive State-based health benefits is coverage that— (1) Includes coverage of a range of benefits; (2) Is administered or overseen by the State and receives funds from the State; (3) Is offered in the State of New York, Florida or Pennsylvania; and (4) Was offered as of August 5, 1997. (b) Modifications. A State may modify an existing comprehensive State-based coverage program described in paragraph (a) of this section if— (1) The program continues to include a range of benefits; (2) The State submits an actuarial report demonstrating that the modification does not reduce the actuarial value of the coverage under the program below the lower of either— (i) The actuarial value of the coverage under the program as of August 5, 1997; or (ii) The actuarial value of a benchmark benefit package as described in §457.430 evaluated at the time the modification is requested. Secretary-approved coverage is health benefits coverage that, in the determination of the Secretary, provides appropriate coverage for the population of targeted low-income children covered under the program. Secretary-approved coverage, for which no actuarial analysis is required, may include, but is not limited to the following: (a) Coverage that is the same as the coverage provided to children under the Medicaid State plan. (b) Comprehensive coverage for children offered by the State under a Medicaid demonstration project approved by the Secretary under section 1115 of the Act. (c) Coverage that either includes the full Early and Periodic Screening, Diagnosis, and Treatment (EPSDT) benefit or that the State has extended to the entire Medicaid population in the State. (d) Coverage that includes benchmark health benefits coverage, as specified in §457.420, plus any additional coverage. (e) Coverage that is the same as the coverage provided under §457.440. (f) Coverage, including coverage under a group health plan purchased by the State, that the State demonstrates to be substantially equivalent to or greater than coverage under a benchmark health benefits plan, as specified in §457.420, through use of a benefit-by-benefit comparison which demonstrates that coverage for each benefit meets or exceeds the corresponding coverage under the benchmark health benefits plan. [66 FR 33823, June 25, 2001] A State is not required to provide health benefits coverage under the plan for an item or service for which payment is prohibited under title XXI even if any benchmark health benefits plan includes coverage for that item or service. (a) General rule. FFP under title XXI is not available in expenditures for an abortion, or in expenditures for the purchase of health benefits coverage that includes coverage of abortion services unless the abortion services meet the conditions specified in paragraph (b) of this section. (b) Exceptions—(1) Life of mother. FFP is available in expenditures for abortion services when a physician has found that the abortion is necessary to save the life of the mother. (2) Rape or incest. FFP is available in expenditures for abortion services performed to terminate a pregnancy resulting from an act of rape or incest. (c) Partial Federal funding prohibited. (1) FFP is not available to a State for any amount expended under the title XXI plan to assist in the purchase, in whole or in part, of health benefits coverage that includes coverage of abortions other than those specified in paragraph (b) of this section. (2) If a State wishes to have managed care entities provide abortions in addition to those specified in paragraph (b) of this section, those abortions must be provided under a separate contract using non-Federal funds. A State may not set aside a portion of the capitated rate paid to a managed care entity to be paid with State-only funds, or append riders, attachments or addenda to existing contracts with managed care entities to separate the additional abortion services from the other services covered by the contract. (3) Nothing in this section affects the expenditure by a State, locality, or private person or entity of State, local, or private funds (other than those expended under the State plan) for any abortion services or for health benefits coverage that includes coverage of abortion services. (a) Preexisting condition exclusions. (1) Except as permitted under paragraph (a)(2) of this section, the State may not permit the imposition of any pre-existing condition exclusion for covered services under the State plan. (2) If the State obtains health benefits coverage through payment or a contract for health benefits coverage under a group health plan or group health insurance coverage, the State may permit the imposition of a pre-existing condition exclusion but only to the extent that the exclusion is permitted under the applicable provisions of part 7 of subtitle B of title I of the Employee Retirement Income Security Act of 1974 (ERISA) and title XXVII of the Public Health Service Act. (b) Relation of title XXI to other laws. (1) ERISA. Nothing in this title affects or modifies section 514 of ERISA with respect to a group health plan as defined by section 2791(a)(1) of the Public Health Service Act. (2) Health Insurance Portability and Accountability Act (HIPAA). Health benefits coverage provided under a State plan and coverage provided as a cost-effective alternative, as described in subpart J of this part, is creditable coverage for purposes of part 7 of subtitle B of title II of ERISA, title XXVII of the Public Health Service Act, and subtitle K of the Internal Revenue Code of 1986. (3) Mental Health Parity Act (MHPA). Health benefits coverage under a group health plan provided under a State plan must comply with the requirements of the MHPA of 1996 regarding parity in the application of annual and lifetime dollar limits to mental health benefits in accordance with 45 CFR 146.136. (4) Newborns and Mothers Health Protection Act (NMHPA). Health benefits coverage under a group health plan provided under a State plan must comply with the requirements of the NMHPA of 1996 regarding requirements for minimum hospital stays for mothers and newborns in accordance with 45 CFR 146.130 and 148.170. A State that elects to obtain health benefits coverage through a separate child health program must include in its State plan a description of the child health assistance provided under the plan for targeted low-income children, including a description of the proposed methods of delivery and utilization control systems. A State must— (a) Describe the methods of delivery of child health assistance including the choice of financing and the methods for assuring delivery of the insurance products and delivery of health care services covered by such products to the enrollees, including any variations; and (b) Describe utilization control systems designed to ensure that enrollees receiving health care services under the State plan receive only appropriate and medically necessary health care consistent with the benefit package described in the approved State plan. A State plan must include a description of the methods that a State uses for assuring the quality and appropriateness of care provided under the plan, including how the State will assure: (a) Access to well-baby care, well-child care, well-adolescent care and childhood and adolescent immunizations. (b) Access to covered services, including emergency services as defined at §457.10. (c) Appropriate and timely procedures to monitor and treat enrollees with chronic, complex, or serious medical conditions, including access to an adequate number of visits to specialists experienced in treating the specific medical condition and access to out-of-network providers when the network is not adequate for the enrollee's medical condition. (d) That decisions related to the prior authorization of health services are completed as follows: (1) In accordance with the medical needs of the patient, within 14 days after receipt of a request for services. A possible extension of up to 14 days may be permitted if the enrollee requests the extension or if the physician or health plan determines that additional information is needed; or (2) In accordance with existing State law regarding prior authorization of health services. [66 FR 2678, Jan. 11, 2001, as amended at 66 FR 33824, June 25, 2001]
Title 42: Public Health
PART 457—ALLOTMENTS AND GRANTS TO STATES
Subpart D—State Plan Requirements: Coverage and Benefits
§ 457.401 Basis, scope, and applicability.
§ 457.402 Definition of child health assistance.
§ 457.410 Health benefits coverage options.
§ 457.420 Benchmark health benefits coverage.
§ 457.430 Benchmark-equivalent health benefits coverage.
§ 457.431 Actuarial report for benchmark-equivalent coverage.
§ 457.440 Existing comprehensive State-based coverage.
§ 457.450 Secretary-approved coverage.
§ 457.470 Prohibited coverage.
§ 457.475 Limitations on coverage: Abortions.
§ 457.480 Preexisting condition exclusions and relation to other laws.
§ 457.490 Delivery and utilization control systems.
§ 457.495 State assurance of access to care and procedures to assure quality and appropriateness of care.
