Part 15. TEXAS HEALTH AND HUMAN SERVICES COMMISSION

Chapter 370. STATE CHILDREN'S HEALTH INSURANCE PROGRAM

The Health and Human Services Commission (HHSC) adopts new Chapter 370, State Children's Health Insurance Program: Subchapter A, Program Administration, §§370.1, 370.2, 370.3, 370.4, and 370.10; Subchapter B, Application Screening, Referral and Processing, Division 1, TexCare Partnership application process, §§370.20, 370.21. 370.22, 370.23, 370.24, 370.25; Division 2, Applicant Rights and Responsibilities Regarding Application and Eligibility, §§370.30, 370.31; Division 3, Eligibility Determination, §§370.40; Division 4, Eligibility criteria, §§370.42, 370.43, 370.44, 370.45, 370.46, 370.47, 370.48, 370.49; and Division 5, Review and Reconsideration of Eligibility Denials and Temporary Enrollment, §§370.50, 370.51, 370.52, 370.53, and 370.54, with changes from the proposed text as published in the September 15, 2000, issue of the Texas Register (25 TexReg 9131).

Chapter 62, Health and Safety Code, establishes the State Child Health Plan authorized under Title XXI of the federal Social Security Act, 42 U.S.C. §§1397aa, et seq. Section 62.051, Health and Safety Code, designates HHSC as the agency responsible for developing the state-designed child health plan program for Texas, making policy for the program, and adopting rules as necessary to implement chapter 62.

Chapter 63, Health and Safety Code, authorizes health benefits coverage for certain children who are ineligible for the State Child Health Plan authorized under chapter 62 or the state Medicaid program. HHSC is directed to develop and implement this plan which, to the extent possible, must provide benefits comparable to the plan established under chapter 62.

HHSC received comments from the following persons or organizations: Anne Dunkelberg, Center for Public Policy Priorities; the West Texas CHIP Coalition; Sydney Tye Stuart, Texas Universities Health Plan; Birch and Davis Health Management Corporation; Deborah Gardner Raskin, Texas Rural Legal Aid; and the Texas Disability Policy Consortium.

General Comment: One commenter voiced general concern regarding how children in families of mixed immigration status fare in the eligibility process and believe the way in which Texas treats such families is critical to achieving HHSC's ambitious enrollment goals. The commenter commended HHSC and the Texas Department of Health (TDH) for recognizing the importance of addressing the needs of these families.

Response: HHSC appreciates the comment and will continue to monitor changes to federal laws that regulate the eligibility of non-citizens to obtain access public health benefits, including CHIP.

General Comment: One commenter submitted general statements about legislation that is pending in Congress which, if enacted, would create a state option to eliminate the 5-year bar against Medicaid and CHIP participation for qualified aliens who arrived on or after August 22,1996. Recognizing that passage of the federal bill would eliminate the need for the separate "look-alike" program created under chapter 63, Health and Safety Code, the commenter questioned whether a reference to the potential merging of children eligible under chapter 63 into the CHIP program authorized by chapter 62, Health and Safety Code, should be referenced in the rule.

Response: Since Congress did not enact the proposed legislation described in the comment, HHSC did not make any changes to the adopted rules regarding this issue.

Comment: One commenter expressed general concerns about the lapse in coverage that occurs when a child gets off Medicaid and applies for CHIP coverage. The electronic status report generated by the Texas Department of Human Services (DHS) will show the child on Medicaid past the cut-off date for CHIP enrollment although they are no longer on Medicaid, thereby delaying enrollment of the child in CHIP until the following month.

Response: HHSC is aware of issues concerning CHIP and Medicaid eligibility interaction. HHSC has implemented an ongoing CHIP and Medicaid coordination effort intended to address these timing problems.

Comment: One commenter questioned whether non-custodial parents who are ordered by a court to purchase medical insurance for their children can enroll their children in CHIP.

Response: Currently only the custodial parent (or certain other household members) may apply for CHIP. HHSC understands the commenter's concern with this issue and the difficulties this may present to persons attempting to comply with medical support orders. Because a non-custodial parent is not a part of the budget group, as that term is defined under the rules, a non-custodial parent may not be able to provide any information (or reliable information) on income or resources for the household in which the child resides. However, HHSC currently is working with the Office of the Attorney General and the Office of Court Administration on changes in the medical support order law and other options to address this issue. In addition, all the affected state agencies are working to improve efforts to educate family law judges on this issue.

Comment: One commenter suggested the draft rule is somewhat inconsistent in the level of specificity with which important policies are described. The commenter expressed concern that some areas are quite detailed while others are quite broad and urged HHSC to avoid the situation that currently exists with Medicaid eligibility policy. The commenter also expressed his/her understanding that while administrative rules may not be the best method to document many operational level details, the commenter believes it is imperative that CHIP eligibility policies be thoroughly documented in some location that is accessible to all members of the public. The commenter seeks clarification from HHSC whether detailed manuals or handbooks will be created to describe CHIP eligibility policies.

Response: HHSC agrees in principle with the comment, but must ensure any policies regarding operational details of the program are made in compliance with the Administrative Procedure Act. HHSC also agrees that CHIP eligibility policies should be well documented via administrative rules and that the public should have maximum access to the policies that regulate only the internal management of the program. HHSC intends to provide greater public access in the future to such internal policies through various means, including web site publications.

Comment: Three commenters expressed general concern regarding the inconsistency between CHIP's definition of "countable income" and the definition used by TDHS for purposes of Medicaid and other benefits. One commenter applauded CHIP's definition of "countable income" and recommended its incorporation into the Medicaid income eligibility regulations. One commenter believed the inconsistencies in current CHIP and Medicaid policy create unnecessary inconvenience for parents. One commenter suggested the State may use different definitions of income for CHIP and Medicaid, but proposed federal CHIP regulations require the State to use the Medicaid definitions of income to screen for children potentially eligible for poverty-level Medicaid. See 42 C.F.R. §457.350. Another commenter stated that Texas has chosen to use methods developed under the Temporary Assistance for Needy Families (TANF) program for determining countable income and resources for poverty-level Medicaid, with few exceptions. See 40 T.A.C. §4.1010. These commenters consider TANF methods more inclusive than those now proposed for CHIP because TANF counts irregular and unpredictable income, including even small gifts. See 40 T.A.C §3.902 and 45 C.F.R. §233.20. The commenters request HHSC solve this problem by using the proposed CHIP income definitions for determining eligibility for Children and Pregnant Women Medicaid benefits.

Response: HHSC understands the commenters concerns; however, the requested policy changes concern rules of TDHS. Therefore, the changes sought by the commenters must occur in TDHS Medicaid eligibility rules rather than the CHIP rules that are the subject of this adoption.

Comment: Two commenters requested that the rules include a requirement that CHIP post on the Internet weekly or monthly enrollment figures by county, including a breakdown by category of the number of children denied Medicaid.

Response: HHSC agrees with commenters regarding the importance of posting weekly or monthly CHIP enrollment numbers on the Internet. However, HHSC does not believe that a rule is necessary in order to implement these comments.

Comment: One commenter submitted a general recommendation that CBOs have access to the names of families that are about to "time out"-that is, families whose applications will be administratively closed because of a lack of information and a failure of the family to supply such information following requests by the program. This comment relates to proposed §370.25(c)(1), Termination of an incomplete application.

Response: HHSC acknowledges the commenter's concern regarding "timed out" applications, but does not believe that a rule is necessary to address this issue.

Comment: Several comments were received questioning the necessity of adding a reference to implementation of Chapter 63, Health and Safety Code to §§370.1, 370.2, 370.20,370.30, Division 3, Division 4, and Division 5.

Response: This reference is unnecessary because §370.1 and §370.2, which generally describe the purpose and scope of the CHIP program, provide that the rules implement both chapters 62 and 63, Health and Safety Code.

Comment: One commenter recommended replacement of the word "preventative" with "preventive" used in proposed §370.2(a). Another commenter recommended the paragraph be revised as follows: "The CHIP is a state-designed child health plan . . . which provides access to low-cost preventative and primary health care to children, including a comprehensive benefits package to children with special health care needs, in certain low-income families of this state. One commenter recognized a grammatical error and suggested substituting the word "provides" to "provide" in the same paragraph.

Response: HHSC agrees to substitute "preventative" with "preventive," but does not believe the structure of the sentence should be revised as suggested because it is not an accurate description of the program. Specifically, the suggested sentence gives the impression that a comprehensive benefits package is offered only to children with special health care needs. CHIP provides the same benefit package to all children; children with special needs receive special case management services as part of their general CHIP benefits. HHSC agrees with commenter to substitute the word "provide" for "provides" in the same paragraph.

Comment: One commenter suggested deleting the words "or national" from the definition of "Alien" in §370.4(2) because naturalized citizens are treated identically to native-born citizens under law.

Response: HHSC agrees with the comment and will revise the definition to read "not a natural born or naturalized citizen of America."

Comment: One commenter stated the definition of "applicant" in §370.4(3) does not distinguish between persons receiving benefits (i.e., children) and those who do not (i.e., parents or guardians). The commenter is concerned that use of the term to refer to someone who is not seeking benefits may create confusion for individuals who are not required to submit social security numbers or immigration documentation. The commenter suggests that if HHSC continues to retain the definition as currently drafted, another defined term should be added that clearly applies only to children seeking to enroll or who are enrolled in CHIP.

Response: HHSC agrees with and appreciates the comment. Section 370.4(3) is revised to define "Applicant" to mean in part "an individual who lives with the child and applies for health insurance coverage on behalf of the child." HHSC has added new language and revised subparagraphs (A), (B), (C), and (D) to further clarify who is considered an applicant. We also recognize the need to substitute where appropriate throughout the rules the term "applicant" for "household" or "family," and have made this change in the following sections: 370.4(4), 370.23(1)(G), 370.25(c)(2), 370.31(b), 370.43(e), 370.44(g)(1), 370.48(1), 370.48(2)(B), 370.48(3)(B), 370.50(a), 370.50(a)(2), 370.50(b), 370.51(a), 370.51(b), 370.53(a)-(c), 370.54(b), and 370.54(3).

Comment: Two comments requested clarification of the meaning of legal or adoptive parent in proposed section 370.4(3)(A). The commenters questioned whether the TexCare Partnership (the name of the CHIP program established under the rules) is now considering applications submitted by non-custodial parents to meet a medical support order for their children.

Response: HHSC agrees this section needs further clarification and has revised the definition of "applicant" in §§370.4(3) to address these and other concerns. Because non-custodial parents may not submit completed applications to the TexCare Partnership, subparagraph (A) is revised to refer to "a child's custodial parent, whether natural or adoptive." Subparagraph (B) is clarified to refer to "a child's grandparent, relative or other adult who provides care for the child. Subparagraph (C) is revised to include "an emancipated minor applying for himself/herself." Subsection (D) is added to clarify that a child's step-parent may apply for CHIP benefits on behalf of a child.

Comment: One commenter requested definition of circumstances in §370.4(4) which will allow a CHIP application to be used for Medicaid, or clarify that the application is for CHIP only and screens only for CHIP.

Response: HHSC agrees with the comment and revises the definition in §370.4(4) by dropping references to Medicaid and THKC because the CHIP application determines CHIP eligibility but only provides information that enables the TexCare Partnership to screen for potential Medicaid eligibility.

Comment: Three commenters requested changes to the definition of "budget group" in §370.4(6). One commenter stated that the definition should enumerate the individuals whose income will be considered and clarify that individuals in one child's budget group may differ from those in the budget group of another child living in the same household. One commenter asked HHSC to define the term "household" to describe individuals living with the child. One commenter indicated that the term "family" should be stricken from the proposed rules because it causes confusion between "budget group," "household," and "applicant." Concern was also expressed that as used in the proposed net income test in §370.44(e)(1)(C), the current definition of "budget group" ensures Medicaid eligible children would be enrolled in CHIP because it counts the needs of fewer children. The commenter requested HHSC consider using the same provision TDHS uses for Children and Pregnant Women Medicaid program (codified at 40 T.A.C. §4.1010 (7)) and to list the adults whose income is counted by the CHIP program. One commenter stated that under Texas law, only natural and adoptive parents have a duty to support a child.

Response: HHSC agrees the rule needs further clarification and revises §370.4(6) to explain that for CHIP income eligibility purposes the budget group consists only of the group of individuals who live with the child for whom an application is submitted, and whose information is used to establish family size and calculate income. Four subsections are added that detail the only persons considered in the budget group, which include the child seeking benefits, siblings of the child, natural or adoptive parents of the child, or step-parents of the child. HHSC believes this level of detail provides greater clarity. The terms "household" and "family" are deleted throughout the rules and HHSC substitutes and/or incorporates the term "budget group" as appropriate for consistency in the following sections: 370.4(6), 370.4(10), 370.4(20), 370.4(22), 370.23(3), 370.23(3)(A)-(D), 470.25((b)(1), 370.46(c)(1), 370.46(c)(1)(D)(i), 370.48(1), 370.48(2), 370.48(3), 370.49, and 370.50(b)(3).

Comment: One commenter, reviewing proposed §370.4(16) (definition of "earned income deductions") asked that the rules consolidate all requirements concerning the computation of income.

Response: As explained below, the definitions affecting computation of income have been clarified, and the rules for computing income for eligibility purposes are codified as §370.44.

Comment: One commenter asked whether the business expenses allowed in §370.44(b)(2) are earned income deductions as defined in §370.4(16).

Response: Business expenses are not considered income deductions as defined in CHIP rules. Deducting business expenses is part of the process of determining actual income for CHIP eligibility purposes and coincides with the standard business practice that subtracts business expenses when determining net income for self-employed individuals

Comment: One commenter requested clarification on whether "earned income deductions" referenced in §370.4(16) are different than "earned income disregards" as referred to in proposed §370.4(23) (definition of "net family income"). Another commenter asked whether there are any work-related earned income deductions other than the work-related expenses, day care, child support, and alimony listed in "net income test and deductions" of proposed §370.44(e)(2). Another commenter sought clarification concerning several issues such as, deducting the income of a child who is enrolled in school, existence of additional business expenses allowed by §370.44(b)(2) (definition of "unearned income deductions") and whether any unearned income deductions exist besides the $50 deducted from the child support a budget group receives.

Response: HHSC agrees that using the terms "disregards" and "earned income deductions," is confusing and will eliminate these terms from the rules. The revised term is "income deductions" (added as new §370.4(15) in the adopted rules and defined as "standardized deductions that are applied to the countable income of the budget group during the CHIP application process"). Please note §370.4(22) is also revised in accordance with this change. There are no earned income deductions under the rules other than work-related expenses, day care, child support, and alimony. Income of a child enrolled in school is not counted for purposes of determining eligibility. As described in §370.44(c)(2), the only unearned income deduction is the $50 deducted from child support the budget group receives.

Comment: One commenter requested a cross-reference to the sections of the rules that define required income and other verifications.

Response: For clarity, HHSC has listed in §370.44(g) the verification process for "current countable income," in §370.44(h) the verification process for "income deductions," and in §370.43(e) the verification requirements for citizenship. We believe these provisions should sufficiently inform applicants of the types of verifications that may be required.

Comment: Regarding §370.4(21) (definition of "income eligibility standard"), one commenter requested clarification of the term "age variable." Another commenter suggested the definition should incorporate by reference the percentage of Federal Poverty Level (FPL) "set by the legislature" rather than the current 200% FPL standard provided in the rule. One commenter is concerned that if the 200% is changed by the legislature it will require amendment of the rules by HHSC.

Response: HHSC agrees that using the term "age variable" is confusing and deletes it from §370.4(21). HHSC disagrees with the comment that this definition should include by reference the "percent FPL set by the legislature" instead of "200%." The Legislature, in §62.101, Health and Safety Code, has delegated to HHSC the responsibility to establish income eligibility criteria for CHIP, subject to the condition that any child whose family income is at or below 200% FPL be eligible for benefits under the program. A change in the FPL limit for CHIP would constitute a significant change in public policy that HHSC believes should be reserved, in the first instance, for the Legislature. The public rulemaking process should reflect the direction of the Legislature as it is applied to the day-to-day operations of the program.

Comment: Three commenters requested the definition of "Net family income" in §370.4(23) be revised to make clear that the child support received by a member of a child's budget group, which is not tied to the support of the child, be excluded in computing the income of the budget group for purposes of that child. The commenters requested the same treatment of other sources of income such as Supplemental Security Income (SSI).

Response: HHSC deleted the term "family" from the rules in response to previous comments that use of the word causes confusion in determining income eligibility. Therefore, the term "net family income" is revised to "net budget group income" to coincide with the new definition of budget group located in §370.4(22). HHSC disagrees with the comment about excluding child support not tied to the support of the applying child, because all siblings are counted in the budget group to determine income eligibility. HHSC agrees that SSI income should not be counted and it is excluded in the definition of budget group in §370.4(6) and the §370.44(c)(4), regarding unearned income.

Comment: One commenter requested that all references to Texas Healthy Kids Corporation in §370.4(28) and throughout the rules, be deleted in light of the Texas Healthy Kids Corporation's impending termination of business operations.

Response: Although HHSC understands this comment, the Texas Healthy Kids Corporation still receives referrals for certain applicants whose income exceeds CHIP and Medicaid eligibility requirements. Consequently, HHSC does not believe this reference should be deleted at this time.

Comment: One commenter requested §370.10 (entitled "Duties and Responsibilities of the Commission") make clear that the list of duties and responsibilities is not exhaustive. Another commenter stated the language in subsection (7) is misleading because federal law imposes no cap on administrative spending for Title XXI; the cap is on federal matching funds available for administrative spending by the state.

Response: HHSC agrees that the duties and responsibilities of HHSC are not exhaustive and revises §370.10 to include "whose CHIP responsibilities include but are not limited to" after state agency. HHSC agrees with the comment regarding federal matching funds, but notes that §370.10(7) is consistent with the language of §62.051(f), Health and Safety Code. Accordingly, no change to this language is made on the basis of this comment.

Comment: One commenter requested §370.20 be revised to clarify that telephone and computer applications are only the beginning of the CHIP eligibility process. One commenter suggested adding the word "process" and substituting the word "initiated" for "completed" in the same section. The commenter asked that the rule include indicate that completion of an application can also be made through telecommunication devices for the deaf (TDD).

Response: HHSC agrees with these comments and has revised the title to §370.20 to read "Availability and method of initiating an application." HHSC substitutes the word "initiated" for the word "completed" in the introductory clause to the section. Subsection (3) is revised to include a reference to TDD.

Comment: Four commenters suggested the wording of §370.21 implies application assistance from sources other than those listed is prohibited. One commenter requested HHSC delete the words "CHIP health plan or" because the independent use of licensed insurance agents and brokers were specifically prohibited at the onset of the CHIP procurement process. One commenter questioned the use of the last sentence in subsection (1) "Telephone applications may also be accepted by TCP staff" as repetitive.

Response: HHSC disagrees that the proposed rule implies that application assistance from sources outside those listed is prohibited. The rule simply outlines how a person may obtain assistance with an application from TCP and a community-based organization (CBO) contracted to HHSC to provide outreach and application assistance. HHSC disagrees with the comment that the words "CHIP health plan or" should be deleted. HHSC currently is operating a pilot project that will assess the use of independent agents for CHIP enrollment. The change sought by the commenter would conflict with that pilot project. HHSC also disagrees that use of the last sentence in §370.21 is redundant. The purpose of the statement is to clarify that TCP also accepts telephone applications, in addition to providing telephone assistance for completing an application. No change is made to §370.21 based on these comments.

Comment: One commenter suggested revising §370.22 to clarify the roles of TCP and the applicant. The commenter believes that, as written, the rule does not explain what TCP does and what the applicant must do.

Response: HHSC agrees with this comment. Section 370.22 is revised as suggested to clarify that, with regard to an application initiated by telephone, TCP's role is to take the application, complete the application as much as possible over the telephone, print the partially completed application, and mail the partially completed application back to the applicant for completion of missing information and/or the applicant's signature. It is the applicant's responsibility to complete all missing information, sign the application, attach all required verifications, and return it to TCP.

Comment: One commenter expressed concern about disenrollments required because of the determination of a family's eligibility under the State Kids Insurance Program (SKIP) after the determination of CHIP eligibility. To reduce this number, the commenter suggested adding the words "or is eligible for health insurance through an employer program" to §370.23(2)(G).

Response: HHSC disagrees that it is necessary to add the suggested language to §370.23(2)(G) because TCP currently has processes in place to identify and refer SKIP-eligible children during the application process.

Comment: One commenter recommended revising §370.23(2)(G) by substituting the word "Indication" for "Confirmation" and adding the word "Medicaid."

Response: HHSC does not believe the substitution is necessary and declines to revise the rule on this basis.

Comment: One commenter asked HHSC to consider adding in §370.23(3)(B) the words "applying for coverage" after the word "anyone," but indicated that this change in family size may create eligibility for Medicaid.

Response: HHSC disagrees with this recommendation and instead substitutes the phrase "budget group" for "family" because information provided on the application relates only to members of the budget group.

Comment: One commenter noted a grammatical error in §370.23(3)(C).

Response: Section 370.23(3) is revised to correct grammatical errors.

Comment: Two commenters asked for clarification on what verifications HHSC is referring to in §370.23(5).

Response: HHSC agrees with this comment and revises §370.23(5) to read "required income, immigration status, and income deduction verifications."

Comment: One commenter asked whether a child's school status must be reported on an application even if the child does not seek to exempt his or her own income. The commenter requested the rule include a cross-reference to the sections that define required verifications.

Response: A child's school status must be reported as described in §370.23(2)(F); however, §370.4(10) explains that the income of a child enrolled in school is not considered "countable income."

Comment: Three commenters requested two provisions be added to §370.24. The first should reflect that, within three working days of the receipt of additional information from an applicant, TCP enter the new information into the eligibility database for purposes of timely completion. The second request is that, upon entering all required application information, TCP send the applicant a verified receipt of all required information.

Response: HHSC disagrees with these suggestions. HHSC believes that current application practices and the provisions of §370.25 adequately address timeliness of the application process and incomplete applications. HHSC believes that sending a verified receipt will unnecessarily add costs to the program and may slow the application process.

Comment: Two commenters advised changing §370.25(a)(2) from the passive voice to the active voice to clearly identify who is responsible for this step.

Response: HHSC agrees with the comment and revises this rule as suggested.

Comment: Two commenters requested HHSC revise §370.25(b)(1) to more accurately reflect what steps TCP takes when it receives an incomplete application due to a missing signature. The commenters believe the rule would be clearer by changing the words "and returns the application" to "then produces and mails an application back."

Response: HHSC agrees with the comments that §§370.25(a)(2) and (b)(1) require further detail and revises these rules as suggested.

Comment: Three commenters expressed concerns regarding §370.30 (entitled "Applicant Rights"). The commenters suggested the rule should include additional assurances that applicants will be asked for personal information only if it is essential. One commenter requested the addition of four provisions that ensure the following applicant rights: the right to be informed of the reason for the denial, and how and by what date to make a request for review; the right to receive with the enrollment package, information regarding timelines for enrollment, and "next-month" coverage deadlines; the right to not have to provide information that is not essential to an eligibility determination; and the right to petition for a change in cost sharing obligations based on changes in income during the 12-month coverage period. The commenters suggested the procedural protections for such a change be identical to those detailed in §§370.51, 370.52, and 370.53.

Response: HHSC believes that Subchapter B, Division 5 of the rules provides sufficient applicant protections and procedural safeguards. However, as we review the new federal regulations regarding applicant and enrollee protections and evaluate the need for further changes to our rules, we will take these comments into consideration. No change to §370.30 was made based on these comments.

Comment: One commenter pointed out a grammatical error preceding "TCP" in §370.30 (3).

Response: The grammatical error in §370.30 (3) is corrected.

Comment: Two commenters expressed concern regarding proposed §370.31. Specifically, the commenters disagreed with enacting any form of permanent ineligibility of a child for CHIP benefits because of the misrepresentations of an applicant. One commenter suggested the proposed rule in §370.31 illustrates the problem with the proposed definition of "applicant," who generally will be a parent or guardian (except for an emancipated minor) and is not eligible for CHIP in the first place. The commenters recommended that children not lose access to CHIP coverage as the result of the misdeeds of a parent or guardian. Although commenters believe it is proper for the State to pursue restitution for fraudulently received benefits, they feel there are simply no circumstances under which it is in the interest of the State to deny children benefits for which they are truly eligible.

Response: HHSC agrees with these comments and understands commenters' concerns. We agree that eligible children should not be held responsible for misrepresentation of information from the applicant. Section 370.31 (b) is revised to clarify that it is the applicant who is held responsible for fraudulent information. HHSC revises the language in subsection (b)(2) because adults in fact are not eligible for CHIP. This change eliminates the possibility of holding a child (unless he or she is an emancipated minor) responsible for the actions of the applicant.

Comment: Two commenters suggested that the 30-day standard for making a CHIP eligibility determination be articulated in Division 3 or elsewhere in the rules. One commenter also suggested the proposed rules should clearly apply these sections to the plan created under Chapter 63 of the Health and Safety Code.

Response: HHSC agrees with the commenter regarding the 30-day standard and have revised § 370.40(b) accordingly. It is unnecessary to change the rules in response to the second comment because §370.1 and §370.2 provide that chapter 370 also implements the plan required by chapter 63, Health & Safety Code.

Comment: One commenter suggested that §370.40 directly precede §370.48 and §370.49 for clarity regarding automatic screening. Commenter also stated the rule should make clear that the CHIP determination be made not later than the 30th day after the date a complete application is submitted on behalf of the child, unless the child is referred to Medicaid. Section 62.104(f) of the Texas Health and Safety code dictates that the "commission must require" this 30-day rule.

Response: HHSC appreciates the comment regarding §370.40 but does not believe it is necessary to move the language as requested. HHSC agrees with the commenter and revises §370.40(b) to include a reference to the 30-day rule.

Comment: One commenter advised it was the intent of the Texas Legislature that children be able to access CHIP coverage from birth and strongly urged HHSC to add language to §370.42 allowing for the enrollment of newborns who may currently fall in the 185-200% FPL group and thus be able to access Medicaid's retroactive benefits for newborns. One commenter requested simplification of §370.42.

Response: HHSC disagrees with the commenter's request to add language to §370.42 regarding enrollment of newborns. We believe that such language is unnecessary because in most of these cases, the addition of the infant as a budget group member will cause the family's FPL to fall within the Medicaid income range and make the newborn and mother eligible for retroactive benefits. HHSC agrees that §370.42(a) should be simplified and revises it as suggested.

Comment: One commenter requested clarification regarding §370.43, on whether or not full benefits under CHIP are only available within the Covered Service Area, and that benefits beyond the CHIP Service Area are for emergency services only. The commenter also questioned whether children who do not live in Texas, but whose parent, under court order to provide the children's insurance, does live in the state, are eligible for CHIP.

Response: The commenter's questions relate to the scope of coverage under CHIP and not to eligibility for CHIP benefits. Scope of coverage and benefits will be addressed in subsequent proposed rules. Therefore, no revision is necessary to §370.43. In response to the commenter's second question, the child must be a Texas resident to be eligible for CHIP.

Comment: Two commenters suggested that the use of undefined terms in §370.43(e) to describe non-U.S. citizens may be confusing and requests that HHSC specifically reference children deemed to be qualified aliens under a "VAWA self-petition" in this listing. Commenter also recommends HHSC define the verification requirements to prove a child is a "qualified alien" or a "non-citizen lawfully admitted as a resident." Commenter attached a matrix provided by the National Immigration Law Center (NILC) to be used for additional documents that may be available to immigrants and requested HHSC add language in the rule referencing these documents. Commenter questions why there is a reference to THKC in §370.43(f) when they are no longer taking enrollment.

Response: HHSC agrees with commenter and revises §370.43(e) to include additional verification requirements. However, the suggestion that we adopt the full NILC list of forms as recommended by one commenter is not incorporated into the language because the list of approved documents is subject to change and could necessitate a rule change every time a form was added or deleted. HHSC believes this revision will encompass any INS-approved forms. HHSC agrees with the commenter there is no longer a need to reference THKC in §370.43(f) and deletes subsection from the rule.

Comment: Two commenters requested HHSC to further define the "business expenses" that an applicant may deduct in §370.44(b)(2).

Response: HHSC disagrees with the commenter's recommendation to further define the "business expenses" an applicant may deduct in §370.44(b)(2). Defining a specific list could limit TCP's flexibility in evaluating applications.

Comment: One commenter requested clarification of the statement, "All budget groups must pass the net income test," which appears in §370.44(e)(1)(C)."

Response: In response to this comment, HHSC provides a definition of "net income test" in §370.44(e)(1)(B).

Comment: One commenter indicated that it is difficult to understand in §370.44(e)(2) what an applicant may deduct.

Response: HHSC disagrees with commenter. We believe that §370.44(e)(2) clearly outlines the types of deductions an applicant may take. In addition, subsection (D) was added to clarify that TCP deducts the first $50 of the total child support payments the budget group receives.

Comment: Three commenters suggested the amount of the deductions allowed for dependent care in §370.44(e)(2)(b) be raised to reflect the actual costs for the care of a dependent child or disabled adult.

Response: HHSC disagrees with commenter's request. In order to avoid improperly enrolling Medicaid-eligible children into CHIP, CHIP rules regarding income deductions must be consistent with Medicaid policy.

Comment: Other commenters encouraged the commission to exempt government benefits from countable income.

Response: For the reasons stated above, HHSC cannot make the change requested by the commenters.

Comment: One commenter pointed out a typographical error in §370.44(e)(2)(C).

Response: HHSC has corrected the typographical error in §370.44(e)(2)(C).

Comment: One commenter requested that HHSC make clear in §370.44(g)(3) that verification is required only for the income of budget group members. The commenter also asked for clarification on how many paychecks an applicant must provide and to define the time for which an employer must verify income.

Response: HHSC disagrees with commenter that further clarification is needed to ensure applicants understand that verification is required only for the income of budget group members. Section 370.44(a)(2), provides that "TCP must consider the income of all persons included in the budget group" and repeatedly uses the term "budget group" in an effort to eliminate confusion regarding whose income verification is required. HHSC agrees with commenter that §370.44(g)(3) is unclear about how many paychecks or child support checks are needed for verification and adds the language "one or more" to this section. This standard also applies to employers who verify income.

Comment: Two commenters asked that HHSC clarify in §370.46(a) that a child subject to the waiting period has the right to apply during such waiting period.

Response: HHSC agrees with this comment and revises §370.46(a) to accurately reflect that a child who is otherwise eligible for CHIP, but subject to the waiting period, has a right to apply and be enrolled after the 90-day waiting period.

Comment: One commenter also urged the commission to exempt from the 90-day waiting period any child who meets the eligibility requirements for the CSHCN (Children with Special and Complex Health Care Needs) program.

Response: We disagree with the comment that we should exempt CSCHCN-eligible children from the waiting period. Section 370.46 implements §62.154, Health and Safety Code, which does expressly provide an exemption from the waiting period for children with special and complex health care needs. We believe this change requires legislation.

Comment: One commenter requested HHSC delete from §370.46(c)(1)(A) the words "due to," and eliminate sections (i), (ii), and (iii).

Response: HHSC disagrees with this comment because it is inconsistent with the language of §62.154, Health and Safety Code.

Comment: Commenter also noted in §370.46(c)(4) that the reference to subsection (c) should be changed to "(d)."

Response: We agree with the comment and have incorporated the suggested change.

Comment: Three commenters recommended HHSC revise §370.48(1) because, as written, it indicates that if at least one child appears to meet Medicaid income eligibility standards, TCP transfers the application to TDHS. The commenters find the phrase "at least one child" confusing.

Response: HHSC agrees with commenters that the "at least one child" language in §370.48(1) is confusing and substitutes "a child" at the beginning of this rule.

Comment: One commenter asked that §370.48(1)(B) be revised to require TCP to notify the family of its potential Medicaid eligibility in writing and provide guidance regarding TDHS's role for follow-up with the family.

Response: HHSC agrees with comment and adds §370.48(1)(C) to clarify that TCP will notify the family in writing of its potential Medicaid eligibility and provide guidance regarding TDHS's role for follow-up with the family.

Comment: One commenter asked that HHSC define the "Medicaid assets" that TCP reviews to determine whether a child becomes CHIP-eligible or is referred to Medicaid. The commenter further asks HHSC to define the "guidance" TDHS will provide an applicant who is referred to Medicaid.

Response: HHSC disagrees with this comment because we believe CHIP rules should not duplicate Medicaid eligibility rules, which govern the examination of an applicant's assets for Medicaid eligibility purposes. Similarly, HHSC is not authorized to adopt rules that govern TDHS guidance to Medicaid applicants.

Comment: Two commenters questioned HHSC's use of "permissive" language in §370.49 ("may" deem) because it is inconsistent with the mandatory language in the CHIP statute at §62.104(d).

Response: HHSC disagrees with comment. Section 370.49 in part implements §62.104(d), Health and Safety Code. We believe the adopted rule is consistent with the plain language of this statute. HHSC therefore declines to change the rule as requested.

Comment: Two commenters expressed concern about the meaning of the phrase "failure . . . to comply with other cooperation criteria (for Medicaid)" in proposed §370.49.

Response: HHSC understands the concern and deletes this phrase from the adopted rule.

Comment: One commenter requested HHSC to add language to §370.51 that allows a family to request a review by TCP in writing or by telephone.

Response: HHSC disagrees with the comment that the rules should allow a request for review to be made by telephone. We believe that telephone requests are more difficult to document and verify. In contrast, requests made in writing can be more reliably documented and will include the signature of the individual, providing further integrity to the process.

Comment: One commenter indicated that an applicant should not have to request a review before being informed of the reasoning behind a denial.

Response: HHSC disagrees with this comment. Currently, TCP referral letters state the reason for CHIP ineligibility and provide the applicant instructions on how to obtain a review.

Comment: One commenter recommended the denial letter should include the address and timeframes in which to request a review, TCP response timeframe, and the address and phone numbers of several legal services organizations.

Response: This comment does not address language in the proposed rules; however, we will take these comments, as well as pending federal regulations on the subject, into consideration for future implementation or rulemaking.

Comment: One commenter noted that in §370.52(a) a reference was made to requests being made "by telephone or in writing" although §370.51(b) states the request for review is to be in writing. One commenter requested HHSC delete the wording "whether the request was submitted by telephone or in writing" from this section for consistency.

Response: HHSC concurs there is inconsistency between §370.52(a) and §370.51(b) and deletes the reference to submitting requests by telephone or in writing as suggested.

Comment: Two commenters requested corrections be made to §370.52(b)(1)-(3) changing "5th" to "10th" and substituting the word "family" for "requester."

Response: HHSC revises §370.52(b)(1)-(3) by changing "5th" to "10th."

Comment Several commenters were generally concerned that families would not receive important information regarding the request for review process.

Response: HHSC revises §370.52 (by substituting the term "family" for "requester."

Comment: Two commenters recommended revisions to §370.53(a) and (b) to allow applicants 30 days to request reconsideration by HHSC in writing or by telephone, and grant a right to a hearing on the request for reconsideration.

Response: HHSC believes commenters' request that applicants be allowed additional time to request a review of a TCP eligibility or temporary enrollment decision is reasonable; however, HHSC believes 20 working days is a more reasonable amount of time and will facilitate the prompt and efficient disposition of these matters. HHSC therefore revises §370.53(b) to reflect 20 working days instead of 15. HHSC disagrees that CHIP members are entitled to a hearing on requests for reconsideration and believes that the adopted rules provide sufficient and reasonable safeguards to permit a prompt and efficient review of eligibility and temporary enrollment decisions.

Comment: One commenter requested HHSC substitute "20 working days" for "15 working days" in §370.53(c).

Response: HHSC believes commenters' request that applicants be allowed additional time to request reconsideration by HHSC is reasonable and therefore revises §370.53(b) to reflect 20 working days instead of 15.

Comment: One commenter suggested a list of additional applicant rights be added to §370.53.

Response: HHSC appreciates commenters' concerns regarding applicant rights. HHSC is reviewing pending federal regulations and will consider these comments when changes are made to the CHIP state plan and administrative rules to reflect the final federal regulations.

Comment: One commenter requested HHSC redraft and combine subsections (b) and (e) of §370.54. The commenter also asked for clarification in §370.54 regarding repayment of costs of coverage during temporary enrollment if enrollment is not continued.

Response: Subsections (b) and (e) are simply intended to inform the public of the importance of including factual information in a request for review or reconsideration and the consequences of failing to include such information in the request. HHSC does not believe a change in the adopted rule is necessary in response to this comment. HHSC, however, agrees with the comment concerning repayment of costs of coverage and has added subsection (g) to clarify that the state will not seek repayment for health care costs during temporary enrollment for a child who ultimately is determined to be ineligible for CHIP.

Subchapter A. PROGRAM ADMINISTRATION

1 TAC §§370.1-307.4, 370.10

These rules are adopted under authority granted to the Commission by Government Code §531.033, which authorizes the commissioner of health and human services to adopt rules necessary to implement the commission's duties, and under Health and Safety Code §62.051(d), which directs the Commission to adopt rules as necessary to implement the Children's Health Insurance Program.

The adopted rules implement chapters 62 and 63, Health and Safety Code.

The new rules are adopted under §62.051(d), Health and Safety Code, which authorizes the commission to adopt rules necessary to implement chapter 62, Health and Safety Code, and under §531.033, Government Code, which provides the commissioner of health and human services with authority to adopt rules necessary to carry the duties of the Health and Human Services Commission under Chapter 531, Government Code.

The adopted rules implement §62.051, Health and Safety Code, concerning development of and the making of policy for the state child health plan program.

§370.1.Purpose.

This chapter implements the State Children's Health Insurance Plan (CHIP), authorized under chapters 62 and 63, Health and Safety Code, in a manner that is timely, efficient, fair, and that promotes access to quality and economical health care for eligible children and their families in Texas.

§370.2.Scope.

(a)

The CHIP is a state-designed child health insurance plan authorized under Title XXI of the federal Social Security Act (42 U.S.C. §§1397aa, et seq.), and chapters 62 and 63, Health and Safety Code, which provides access to low-cost preventive and primary health care to children, including children with special health care needs, in certain low-income families of this state.

(b)

The CHIP is administered, in part, in accordance with the state plan for children's health insurance, filed by the Health and Human Services Commission with the federal Secretary of Health and Human Services, which prescribes the general conditions under which joint federal state child health insurance plan funds will be administered in Texas.

§370.3.Non-entitlement.

The establishment of CHIP does not create an entitlement to health insurance benefits or health care or to assistance in obtaining health insurance or health benefits.

§370.4.Definitions.

The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise:

(1)

"Administrative Contractor" means the entity that performs administrative services for the CHIP under contract with the Commission.

(2)

"Alien" means a person who is not a native born or naturalized citizen of the United States of America.

(3)

"Applicant" means an individual who lives with the child and applies for health insurance coverage on behalf of the child. An applicant can only be:

(A)

a child's custodial parent, whether natural or adoptive;

(B)

a child's grandparent, relative or other adult who provides care for the child;

(C)

an emancipated minor applying for himself/herself; or

(D)

a child's step-parent.

(4)

"Application" means the standardized, written document issued by TCP that an applicant must complete to apply for health care benefits or coverage through CHIP.

(5)

"Application completion date" means the calendar date a completed CHIP application is entered into the TCP database.

(6)

"Budget Group" means the group of individuals who live in the home with the child for whom an application for health insurance is submitted and whose information is used to establish family size and calculate income. Individuals receiving Supplemental Security Income payments are not included in the Budget group. Budget group members include only:

(A)

the child seeking health insurance benefits;

(B)

the child's siblings who live with the child (biological, adopted, or step-siblings);

(C)

the child's natural or adoptive parents; or

(D)

the child's step-parent.

(7)

"Children's Health Insurance Program" or "CHIP" means the Texas State Children's Health Insurance Program established under Title XXI of the federal Social Security Act (42 U.S.C, §§ 1397aa, et seq.) and chapters 62 and 63, Health and Safety Code.

(8)

"Commission" means the Health and Human Services Commission.

(9)

"Completed application" means an application entered into the TCP database that includes all information required under §370.23.

(10)

"Countable income" means any type of payment that is a regular and predictable gain or a benefit to a budget group that is not specifically exempted. Regular and predictable income is income received in one month that is either likely to be received in the next month and/or was received on a regular and predictable basis in past months. It does not include income that is not received on a regular and predictable basis in past months, or is received by the child or sibling member of the budget group who is enrolled in school.

(11)

"Children's Health Insurance Program Service Area" or "CSA" means one of the designated areas in the state that is served by one or more of the CHIP Health Plans or the CHIP Exclusive Provider Organization.

(12)

"Community-based Organization" or "CBO" means an organization that contracts with the Commission to provide outreach services to applicants for CHIP coverage.

(13)

"Dental Plan" means an insurance company, health maintenance organization, or other entity regulated by the Texas Department of Insurance that contracts with the Commission to provide dental benefits coverage to CHIP members.

(14)

"Department" or "TDH" means the Texas Department of Health.

(15)

"Income deductions" means standardized deductions that are applied to the countable income of the budget group during the CHIP application process.

(16)

"Enrollment" means the process by which a child determined to be eligible for CHIP is enrolled in a CHIP health plan serving the CHIP Service Area in which the child resides.

(17)

"Exempt income" means income received by the budget group that is not counted in determining income eligibility.

(18)

"FPL" means Federal Poverty Level Income Guidelines.

(19)

"Health Plan" means a licensed health maintenance organization, indemnity carrier, or authorized exclusive provider organization that contracts with the Commission to provide health benefits coverage to CHIP members.

(20)

"Income eligibility standard" means monthly net budget group income at or below 200% of current (FPL). A child meets the CHIP income eligibility standard if the budget group's monthly net income exceeds the income eligibility standard applied to the child in the Texas Medicaid Program and is at or below the 200% of FPL CHIP monthly income standard.

(21)

"Member" means a child enrolled in a CHIP Health Plan.

(22)

"Net budget group income" means monthly countable income minus deductions.

(23)

"Qualified alien" means an alien who applies for CHIP coverage and who, at the time of such application, satisfies the criteria established under 8 U.S.C. §1641(b).

(24)

"SSI" means Supplemental Security Income.

(25)

"State fiscal year" means the 12-month period beginning September 1 of each calendar year and ending August 31 of the following calendar year.

(26)

"TexCare Partnership" or "TCP" means the name designated to publicly identify the operational entity that provides administrative services for the CHIP program.

(27)

"Texas Healthy Kids Corporation" or "THKC" means the non-profit corporation established under chapter 109, Health & Safety Code.

(28)

"TDHS" means the Texas Department of Human Services.

§370.10.Duties and Responsibilities of the Commission.

The Commission is the state agency whose responsibilities include, but are not limited to, the following:

(1)

developing a state-designed CHIP to obtain health benefits coverage for children in low-income families in a manner that qualifies for federal funding under Title XXI of the Social Security Act;

(2)

making policy for CHIP, including policy related to covered benefits provided under the program, a duty which the Commission may not delegate to another agency or entity;

(3)

overseeing the implementation of CHIP;

(4)

adopting necessary rules to implement CHIP;

(5)

contracting with appropriate individuals and organizations to provide CHIP benefits coverage, community-based outreach, and other services related to the implementation or operation of the CHIP program;

(6)

conducting a review of each entity that enters into a contract with the Commission to ensure that the entity is available, prepared and able to fulfill the entity's obligations under the contract; and

(7)

ensuring that amounts spent for CHIP administration do not exceed any limit on administrative expenditures imposed by federal law.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on March 15, 2001.

TRD-200101540

Marina S. Henderson

Executive Deputy Commissioner

Texas Health and Human Services Commission

Effective date: April 4, 2001

Proposal publication date: September 15, 2000

For further information, please call: (512) 424-6576

1. TEXCARE PARTNERSHIP APPLICATION PROCESS

1 TAC §§370.20-370.25

The new rules are adopted under §62.051(d), Health and Safety Code, which authorizes the commission to adopt rules necessary to implement chapter 62, Health and Safety Code, and under §531.033, Government Code, which provides the commissioner of health and human services with authority to adopt rules necessary to carry the duties of the Health and Human Services Commission under Chapter 531, Government Code.

The adopted rules implement §62.051, Health and Safety Code, concerning development of and the making of policy for the state child health plan program.

§370.20.Availability and method of initiating an application.

The TCP application process may be initiated:

(1)

in writing from an application booklet available from TCP upon telephone request. The application booklet may also be available through CBOs, local organizations that support CBO outreach efforts, and participating CHIP health care providers;

(2)

by computer using printable applications available over the Internet from the TCP website; or

(3)

by telephone through TCP's toll-free telephone number or through TDD.

§370.21.Application assistance.

An applicant for CHIP coverage may obtain assistance completing the application:

(1)

by telephone from TCP staff during hours that are posted on the TCP website or published in applications, brochures, or other marketing media issued or approved by TCP. Telephone applications may also be accepted by TCP staff;

(2)

by telephone or in person from a local CBO; or

(3)

by telephone or in person from a licensed insurance agent or broker that contracts with a CHIP health plan or CBO, provided the applicant is not directly or indirectly induced to enroll in a specific health plan.

§370.22.Completion of telephone applications.

If an applicant telephones to apply, TCP completes as much of the application as possible over the telephone, prints it, and mails it to the applicant. The applicant is responsible for completing any missing information, signing the application, attaching all required verifications, and returning it to TCP.

§370.23. Contents of completed applications.

A completed application must include the following:

(1)

Information concerning the applicant, consisting of:

(A)

The applicant's full name;

(B)

The applicant's home address (including city, county, state and zip code); and

(C)

The applicant's mailing address (including city, county, state, and zip code) if different from the home address;

(2)

Information concerning each child for whom an application is filed, consisting of:

(A)

The child's full name;

(B)

A description of the applicant's relationship to the child;

(C)

The child's date of birth;

(D)

The child's status as a United States citizen or a legal resident;

(E)

The full name of the child's mother or father;

(F)

If the child has income reported on the application, the child's school status; and

(G)

Confirmation by the applicant whether the child currently has health insurance, Medicaid, or had health insurance within 90 days prior to the date the application is being completed.

(3)

Information concerning the budget group, including:

(A)

budget group income, including the name of the person receiving the income, the employer or source of the income, the amount received, and the frequency of receipt;

(B)

whether anyone in the budget group is pregnant;

(C)

whether anyone in the budget group pays for child or disabled adult care to permit a budget group member to work or receive training;

(D)

whether anyone in the budget group pays child support and/or alimony to anyone outside the home;

(4)

the applicant's original signature and the date of signature; and

(5)

required income, immigration status, and income deduction verifications.

§370.24.Electronic Entry of Application Information.

Within three working days from receipt of an application TCP:

(1)

enters the application, regardless of origin or completeness, into a database;

(2)

date-stamps the application; and

(3)

assigns a unique application identification number.

§370.25.Incomplete applications.

(a)

Missing information.

(1)

TCP monitors the status of entered, incomplete application information.

(2)

If it receives an incomplete application, TCP sends the applicant an initial follow-up letter requesting the missing information. TCP will send the initial follow-up letter within two working days from the date the application information is entered into the database.

(3)

If TCP does not receive the requested missing information within 14 calendar days, TCP sends the applicant a second follow-up letter requesting the missing information.

(b)

Missing signatures.

(1)

If an application is incomplete because it lacks the signature of the applicant, or a parent, or the step-parent in the budget group, TCP enters the application information into the database, then produces and mails an application back to the applicant for signature.

(2)

The application remains incomplete until TCP receives the signed application and enters receipt of the signed application into the database.

(c)

Termination of an incomplete application.

(1)

If an application remains incomplete 90 calendar days from the date TCP entered the incomplete application information into the database, the application process is terminated.

(2)

An applicant whose application is terminated because it is incomplete must complete a new TCP application before CHIP coverage is provided.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on March 15, 2001.

TRD-200101541

Marina S. Henderson

Executive Deputy Commissioner

Texas Health and Human Services Commission

Effective date: April 4, 2001

Proposal publication date: September 15, 2000

For further information, please call: (512) 424-6576

1 TAC §370.30, §370.31

The new rules are adopted under §62.051(d), Health and Safety Code, which authorizes the commission to adopt rules necessary to implement chapter 62, Health and Safety Code, and under §531.033, Government Code, which provides the commissioner of health and human services with authority to adopt rules necessary to carry the duties of the Health and Human Services Commission under Chapter 531, Government Code.

The adopted rules implement §62.051, Health and Safety Code, concerning development of and the making of policy for the state child health plan program.

§370.30.Applicant rights.

An applicant has the right to:

(1)

be treated fairly and equally regardless of race, color, religion, national origin, gender, political beliefs or disability;

(2)

request a review and/or reconsideration of an adverse decision related to CHIP eligibility, disenrollment, or increased cost sharing

(3)

file a complaint, in writing or by telephone, about the application process for reasons other than an eligibility decision, disenrollment, or an increase in cost-sharing within 30 working days from the date of an incident. TCP must respond in writing within 15 working days.

§370.31.Applicant responsibilities.

(a)

An applicant is responsible for:

(1)

correctly and truthfully completing the TCP application form regardless of where the application was obtained;

(2)

providing all required verifications; and

(3)

mailing the completed, signed application along with all required verifications to TCP.

(b)

If an applicant intentionally misrepresents information on an application to receive a program benefit, the applicant:

(1)

is responsible for reimbursing the state for the cost of improperly paid benefits; and

(2)

may be subject to prosecution under the Texas Penal Code.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on March 15, 2001.

TRD-200101542

Marina S. Henderson

Executive Deputy Commissioner

Texas Health and Human Services Commission

Effective date: April 4, 2001

Proposal publication date: September 15, 2000

For further information, please call: (512) 424-6576

1 TAC §370.40

The new rules are adopted under §62.051(d), Health and Safety Code, which authorizes the commission to adopt rules necessary to implement chapter 62, Health and Safety Code, and under §531.033, Government Code, which provides the commissioner of health and human services with authority to adopt rules necessary to carry the duties of the Health and Human Services Commission under Chapter 531, Government Code.

The adopted rules implement §62.051, Health and Safety Code, concerning development of and the making of policy for the state child health plan program.

§370.40.Determining Eligibility.

(a)

Once TCP enters a completed application into the database, the automated eligibility system passes the information through an eligibility screen to determine potential eligibility for CHIP, Medicaid, or THKC.

(b)

CHIP eligibility is determined not later than the 30th day after the date a complete application is submitted on behalf of a child, unless the child is referred for Medicaid application in accordance with the criteria specified in Sections 370.43 through 370.47.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on March 15, 2001.

TRD-200101543

Marina S. Henderson

Executive Deputy Commissioner

Texas Health and Human Services Commission

Effective date: April 4, 2001

Proposal publication date: September 15, 2000

For further information, please call: (512) 424-6576

1 TAC §§370.42-370.49

The new rules are adopted under §62.051(d), Health and Safety Code, which authorizes the commission to adopt rules necessary to implement chapter 62, Health and Safety Code, and under §531.033, Government Code, which provides the commissioner of health and human services with authority to adopt rules necessary to carry the duties of the Health and Human Services Commission under Chapter 531, Government Code.

The adopted rules implement §62.051, Health and Safety Code, concerning development of and the making of policy for the state child health plan program.

§370.42.Age limits.

(a)

A child is eligible for CHIP from the day he or she is born until the end of the month in which the child reaches age nineteen.

(b)

The applicant states the child's birth date on the application form. Verification of age is not required.

§370.43.Citizenship and residency.

(a)

An eligible CHIP child must be a citizen of the United States of America or a non-citizen who is a qualified alien.

(b)

An eligible CHIP child must be a Texas resident. A child is a Texas resident if:

(1)

the child's fixed residence is located in Texas and the child's family intends for the child to return to Texas after any temporary absences;

(2)

the child has no fixed residence but the child's family intends to remain in the state; or

(3)

the child has recently moved to Texas and the child's family intends to remain in the state.

(c)

A child does not lose status as a state resident because of temporary absences from the state. No time limits are placed on a child's temporary absence from the state.

(d)

There are no durational requirements for residency. A child without a fixed residence or a new resident in the state who intends to remain in the state is considered a Texas resident.

(e)

The applicant states the child's citizenship, lawful resident status and Texas residency on the TCP application form. If the applicant states that the child is a United States citizen and a Texas resident, no verification of this status is required. If the applicant states the child is not a United States citizen, the applicant must provide a photocopy of a Resident Alien Card (Green Card), I-94 Card (White Visitor Card), I-688-B, I-766, I-551, an INS asylum letter, an order from an immigration judge granting asylum or showing deportation was withheld, employment authorization, passport or visa, or any other U. S. Immigration and Naturalization Service approved document that demonstrates that the child is a qualified alien.

§370.44.Income.

(a)

General principles.

(1)

Income is either countable income or exempt income.

(2)

TCP must consider the income of all persons included in the budget group.

(b)

Earned income is countable income received by the budget group and includes:

(1)

Military pay and allowances for housing, food, base pay, and flight pay;

(2)

Self-employment income (minus business expenses). A person is self-employed if he is engaged in an enterprise for gain, either as an independent contractor, franchise holder, or owner-operator. If someone other than the earner withholds either income taxes or FICA from the earner's earnings, the earner is an employee and is not self-employed;

(3)

Wages, salaries, and commissions; and

(4)

On-the-Job Training payments funded under the Workforce Investment Act of 1998, 29 U.S.C. §§ 2801-2872, if received by an adult member of the budget group.

(c)

Unearned income is countable income received by the budget group and includes:

(1)

Cash contributions received on a regular and predictable basis;

(2)

Child support payments, except for the first $50 from the budget group's total monthly child support payments;

(3)

Disability insurance benefits;

(4)

Government-sponsored program payments, (except for Supplemental Security Income payments); however, payments from crisis intervention programs are exempt;

(5)

Pensions;

(6)

Retirement, survivors, and disability insurance (RSDI) benefits and other retirement benefits (minus the amount deducted from the RSDI check for the Medicare premium and any amount that is being recouped for a prior overpayment);

(7)

Income from property, whether from rent, lease, or sale on an installment plan;

(8)

Unemployment compensation;

(9)

Veterans Administration (VA) benefits other than benefits that meet a special need;

(10)

Worker's compensation benefits; and

(11)

Alimony.

(d)

All income that is not included as countable earned income or countable unearned income is exempt income.

(e)

Net income test and deductions.

(1)

Net income test.

(A)

The net income test is used to determine eligibility.

(B)

Net monthly income is gross monthly income minus income deductions.

(C)

A child is eligible if the budget group's net monthly income, after rounding down cents, is equal to or less than the 200% of FPL for the budget group's size. All budget groups must pass the net income test.

(2)

Income deductions. TCP makes the following deductions from countable income :

(A)

TCP allows a standard work-related expense deduction of $120 a month for each employed budget group member;

(B)

TCP deducts payments for the actual costs for the care of a dependent child or disabled adult, if necessary for employment or to receive training. The maximum dependent care deduction is $200 per month for each dependent child and $175 per month for each dependent disabled adult.

(C)

TCP deducts payments for the actual costs of alimony or child support paid to an individual who is not a budget group member.

(D)

TCP deducts the first $50 of the total child support payments the budget group receives.

(f)

Computing countable income. TCP converts income received non-monthly to monthly amounts by:

(1)

dividing yearly income by 12;

(2)

multiplying weekly income by 4.33;

(3)

adding amounts received twice a month; or

(4)

multiplying amounts received every other week by 2.17.

(g)

Verification of current countable income.

(1)

Countable income must be verified unless the amount of income reported by the applicant makes the child ineligible.

(2)

TCP verifies all countable income at initial application.

(3)

Verification may include, but is not limited to, obtaining:

(A)

copies of one or more paycheck stubs issued within the immediately preceding 60-day period;

(B)

a copy of the most recent federal income tax return;

(C)

a copy of the applicant's most recent Social Security statement;

(D)

copies of one or more child support checks; or

(E)

written confirmation from an employer of the applicant's income.

(h)

Verification of income deductions. Verification may include, but is not limited to, obtaining:

(1)

a copy of a paycheck stub showing garnishment of wages for a child support deduction if the paycheck clearly indicates the deduction is for child support;

(2)

a copy of a hand written statement authored and signed by the custodial parent verifying the child support deduction; or

(3)

a copy of a divorce decree specifying child support payments.

§370.45.Medicaid Eligibility.

A child who meets all Medicaid eligibility requirements is not eligible for CHIP.

§370.46.Waiting period.

(a)

A child who is otherwise eligible for CHIP may not be enrolled if the child was covered by health insurance at any time within the 90 days immediately preceding the submission of a CHIP application. After the 90-day waiting period, the child may be enrolled.

(b)

Collateral health benefits provided to a CHIP-eligible child under a different type of insurance, such as workers compensation or personal injury protection under an automobile policy, is not health insurance coverage for purposes of this section.

(c)

The 90-day waiting period specified in paragraph (a) of this section does not apply to a child under the following circumstances:

(1)

The child's budget group lost insurance coverage for the child because:

(A)

The employment of a member of the Budget Group was terminated due to:

(i)

a layoff;

(ii)

a reduction-in-force; or

(iii)

a business closure;

(B)

Insurance benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985 (Pub. L. No. 99-272) terminated;

(C)

The marital status of a parent of the child has changed;

(D)

The child's Medicaid eligibility was terminated because:

(i)

the budget group's earnings or resources exceed allowable amounts for Medicaid eligibility; or

(ii)

the child reached an age for which Medicaid benefits are no longer available; or

(E)

Other circumstances similar to those described in this subparagraph that result in an involuntary loss of insurance coverage;

(2)

The child had insurance coverage provided by THKC, ERS, Laredo CHIP Pilot, or CHIP in another state;

(3)

The child's health insurance coverage costs more than 10 percent of the budget group's net monthly income; or

(4)

The Commission grants an exception to the waiting period under paragraph (d) of this section.

(d)

The Commission may grant an exception to the 90-day waiting period prescribed by this section if it determines good cause exists to grant an exception and either:

(1)

An applicant requests an exception:

(A)

Prior to submission of an application;

(B)

At the time of application; or

(C)

As part of a request for review or reconsideration of a denial of eligibility under sections 370.52 or 370.54 of this chapter; or

(2)

The Commission reaches a determination based either on information provided by an applicant or information obtained by the Commission.

§370.47.State Kids Insurance Program.

Children of employees who receive health insurance coverage through the Uniform Group Insurance Program (UGIP) administered by the Employee's Retirement System of Texas are ineligible for CHIP. These children qualify for the State Kid's Insurance Program (SKIP) administered by the Employee's Retirement System of Texas if they otherwise meet the eligibility criteria for CHIP.

§370.48.Completion of Application Process.

If the TCP application screening indicates:

(1)

A child in the budget group appears to meet Medicaid income eligibility requirements, TCP sends the applicant a Medicaid Assets Letter to collect information about the budget group's assets and reviews the information returned by the family. If, following this review, the budget group's assets do not exceed Medicaid limits, TCP:

(A)

electronically transfers the application to the Texas Department of Human Services (DHS) within one working day of the application completion date for a Medicaid eligibility determination;

(B)

delivers the paper application to the appropriate DHS office within two additional working days; and

(C)

notifies the applicant of potential Medicaid eligibility in writing with guidance regarding Medicaid's role for follow-up with the family.

(2)

A child in the budget group does not meet one or more Medicaid eligibility requirements, the budget group's net income is at or below 200% of FPL, and the budget group meets all other CHIP eligibility requirements, TCP:

(A)

Determines that the child is eligible for CHIP; and

(B)

Notifies the applicant of the CHIP eligibility by letter and includes a CHIP enrollment packet

(3)

A child in the budget group does not meet one or more Medicaid or CHIP eligibility requirements and the budget group's net budget group income exceeds 200% of FPL, TCP:

(A)

electronically transfers the application to THKC within one working day of the application completion date; and

(B)

Notifies the applicant in writing of the referral to THKC.

§370.49.Medicaid Referrals.

If a TCP applicant child is referred to Medicaid and subsequently determined ineligible for Medicaid, Medicaid denies eligibility and may deem the child eligible for CHIP based on the budget group's income and/or assets, or the child's citizenship or immigration status.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on March 15, 2001.

TRD-200101544

Marina S. Henderson

Executive Deputy Commissioner

Texas Health and Human Services Commission

Effective date: April 4, 2001

Proposal publication date: September 15, 2000

For further information, please call: (512) 424-6576

1 TAC §§370.50-370.54

The new rules are adopted under §62.051(d), Health and Safety Code, which authorizes the commission to adopt rules necessary to implement chapter 62, Health and Safety Code, and under §531.033, Government Code, which provides the commissioner of health and human services with authority to adopt rules necessary to carry the duties of the Health and Human Services Commission under Chapter 531, Government Code.

The adopted rules implement §62.051, Health and Safety Code, concerning development of and the making of policy for the state child health plan program.

§370.50.Matters subject to review and reconsideration of Eligibility denials and Temporary Enrollment.

(a)

An applicant that is dissatisfied or disagrees with certain decisions made by or on behalf of the CHIP program may request:

(1)

a review of the initial decision; and

(2)

if the applicant is dissatisfied with the outcome of the review, a reconsideration of the review of the decision.

(b)

An applicant may request a review and/or reconsideration of the following decisions:

(1)

denial of CHIP eligibility;

(2)

disenrollment of a child; or

(3)

increase in the budget group's cost-sharing obligation.

§370.51.Deadline and method for requesting review of initial decision.

(a)

An applicant may request a review of an initial CHIP decision described in section 370.50(a) within 30 working days from the date the applicant received written notice of the decision.

(b)

An applicant may request a review by contacting TCP in writing.

§370.52.Disposition of request for review.

(a)

TCP must complete its review of the initial decision within 10 working days of receipt of the request for review.

(b)

TCP must notify the requester in writing of the results of its review of the initial decision not later than the 10th day following receipt of the request. The written notification must:

(1)

explain the reason for the initial decision;

(2)

inform the requester whether the initial decision was reversed following TCP's review; and

(3)

if the initial decision is upheld, inform the requester of its right to request reconsideration of the decision by HHSC if the requester disagrees with the decision and provide instructions for submitting a written request for reconsideration by HHSC.

§370.53.Request for reconsideration by HHSC.

(a)

An applicant that is dissatisfied or disagrees with the result of TCP's review of an initial decision may request reconsideration of the TCP review by HHSC.

(b)

An applicant must request reconsideration by HHSC in writing within 20 working days from the date the applicant received the written notice of the result of the TCP review.

(c)

Within 20 working days from the date TCP receives the written request for reconsideration, HHSC must complete the reconsideration and notify the applicant in writing of its final decision.

§370.54.Temporary enrollment pending disposition of review or reconsideration.

(a)

There is no retroactive enrollment in CHIP.

(b)

If an applicant's request for review by TCP of an adverse eligibility decision includes factual information that could have an impact on the decision, TCP will approve temporary enrollment of the child pending completion of the review and/or reconsideration by HHSC of the eligibility decision.

(c)

A child will remain enrolled until the TCP review and/or HHSC reconsideration process is complete.

(d)

If the initial eligibility decision is reversed, the child's 12 months of eligibility continues. If the review/reconsideration confirms the initial decision of ineligibility, the child is disenrolled as of the next cut-off date.

(e)

TCP will not approve temporary enrollment if the applicant's request for review/reconsideration includes no factual basis for reversing the initial eligibility decision.

(f)

TCP may approve temporary enrollment for a child on the basis of a review only once every 12 months.

(g)

If a child who is temporarily enrolled under this section ultimately is determined ineligible for CHIP, no repayment for health care costs during the period of temporary enrollment will be sought by TCP or HHSC.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on March 15, 2001.

TRD-200101545

Marina S. Henderson

Executive Deputy Commissioner

Texas Health and Human Services Commission

Effective date: April 4, 2001

Proposal publication date: September 15, 2000

For further information, please call: (512) 424-6576