Managed care purchasing under SCHIP: a nationwide analysis of freestanding SCHIP contracts

This Policy Brief is the third in a series that examines the State Children's Health Insurance Program (SCHIP), in particular, those state programs that operate directly under the authority of Title XXI of the Social Security Act rather than as an expansion of Medicaid (or a Medicaid demonstration initiative). This series is designed to examine how states structure and administer insurance programs for low-income children when they elect to administer separate SCHIP plans that exist outside of the requirements and constraints of Medicaid. Understanding how states use their flexibility under "separate SCHIP programs" (as they are termed) has become an increasingly important policy question, in the face of heightened interest on the part of Governors, the Bush Administration, and others in comprehensive Medicaid reform. The first two policy briefs in this series analyzed the entitlement status of separately administered SCHIP programs, as well as issues related to coverage design and the definition of medical necessity. This Policy Brief provides the first nationwide overview of how separate SCHIP programs structure "freestanding" SCHIP managed care contracts, i.e., contracts that exist independently of a state's Medicaid managed care agreements. Fifteen such "freestanding" contracts existed as of Calendar Year 2000, and we report here on their general terms of coverage, access, and care coordination. A forthcoming related study will examine behavioral health care in freestanding SCHIP agreements. Following a brief background and discussion of research methods, we present our principal findings and discuss their implications.