The Children’s Health Insurance Program: Congress’ Bipartisan Moment

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Over the past few months there has been a lot of political debate around the future of the Children’s Health Insurance Program or CHIP. Most of the discussion centered around whether Congress was going to take action to re-fund the program; which provides access to low-cost insurance for almost nine million kids and hundreds of thousands of pregnant women in families that earn too much to qualify for Medicaid but still need assistance. While the to fund or not to fund debate was occurring, Congress was also hard at work making tweaks to the program to improve its operation and decrease overall costs. One important change that recently went into effect is that the CHIP program, for the first time, has third party liability rights and is now required to coordinate benefits when it is cost-effective to do so.

When CHIP was rolled out in 1997, it was not anticipated that there would be scenarios where a third party might be liable for a CHIP member’s healthcare claims. Much like in Medicaid, these situations do occur, however CHIP has historically lacked the authority that Medicaid has to coordinate benefits, and therefore has not had the ability to recover the cost of claims from liable third parties. Additionally, CHIP has lacked the data sharing and claims payment requirements that have been the foundation for success of Medicaid third party liability.

As a result of Congress passing the Bipartisan Budget Act of 2018, CHIP programs now have an opportunity to realize new savings through the ability to identify liable third parties, recover for paid claims, and cost avoid future claims. This will help ensure CHIP dollars are spent correctly and that the right liable party is always held financially responsible. This is a model that has worked effectively in Medicaid for some time and results in billions of dollars of recoveries and savings for the program.

While all of the news headlines focused on Congress not being able to agree on the future of CHIP and 114 days passed without a budget agreement, when you peel back the layers, there was actually bipartisan work being done to improve the 21-year-old program. In the end, Congress approved a 10-year funding extension for CHIP and made other necessary changes that will result in additional cost savings for the program. As they say, the devil is in the details.


Kristen Ballantine is Vice President of Government Relations for HMS.