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PEDIATRICS Vol. 102 No. 4 October 1998, pp. 994-995
AMERICAN ACADEMY OF PEDIATRICS:
Principles of Child Health Care Financing
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Child health care financing must maximize access to and ensure quality comprehensive child and maternal care. This policy statement replaces the 1993 policy statement, "Principles of Child Health Care Financing." Changes reflect new state and federal legislation that affect child health care financing. The principles outlined in the policy statement will be used to evaluate the changing structure of health care financing.
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The American Academy of Pediatrics (AAP) advocates
universal and insured financial access to quality health care for all
newborns, infants, children, adolescents, young adults through age 21 years, and pregnant women, hereinafter referred to as children and
pregnant women. Such insurance should provide a comprehensive benefit
package that should include, but not be limited to, pregnancy-related services, preventive care services recommended by the AAP, acute and
chronic care services, and emergency care services. Current financing
systems must be improved to maximize access to and ensure quality
comprehensive child and maternal care. Inequitable financing mechanisms
contribute to the current level of preventable mortality and morbidity
today among children and pregnant women in the United States. Although
the establishment of the State Children's Health Insurance Program
(SCHIP) (Title XXI of the Social Security Act) does not create
universal coverage for all children, it is an important opportunity to
expand insurance to a large portion of uninsured children. In
addition, SCHIP partially addresses current inequitable financing
mechanisms.1
As the public and private sectors and the AAP work to expand the
structure of health care financing, the following principles will be
used to evaluate proposed changes. These principles will be integral in
ensuring that SCHIP, regardless of whether states establish new
programs or expand Medicaid, provides access to quality health care.
Children's Right to Access to the Health Care System
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Standards for Equity, Comprehensiveness, and Quality Assurance
- Health care financing mechanisms should cover all health care needs of children and pregnant women as defined by the AAP in the policy statement, "Scope of Health Care Benefits for Newborns, Infants, Children, Adolescents, and Young Adults Through Age 21 Years."4
- Health care financing mechanisms should include incentives to promote continuity and coordination of care by primary care pediatricians.
- Health care financing mechanisms should recognize with appropriate reimbursements the value of evaluation and management services, care coordination, and performance of medically indicated procedures and surgeries.
- Health care financing mechanisms must incorporate appropriate mechanisms for monitoring and reporting quality-of-care measurements specific to children, including assessments of structure, process and outcome, access, and patient satisfaction. Such mechanisms must include appropriate peer review by pediatricians.
- Health care insurers should be prohibited from denying coverage through the use of preexisting-condition exclusion clauses or severely restrictive medical underwriting practices.
- The AAP recommends that all health insurance policies fulfill the following requirements: 1) no waiting periods for enrollment; 2) no limitation of coverage or reimbursement because of severe chronic or common recurring illnesses; 3) no premium rate increases based on experience, only on community rating; and 4) guaranteed renewability and portability.
- The specifications and limitations of all health financing plans must be stated clearly and be readily understood by all parties.
- Health care financing mechanisms should be flexible and pluralistic. Fair competition among health financing and delivery plans is desirable. Competition should be based on access, service, and quality, and not solely on economics. There should be standardization among programs of benefits and requirements for administrative efficiencies such as uniform claims forms and payment mechanisms.
- Regulations governing health care financing should encourage access to quality pediatric primary, medical subspecialty, and surgical specialty care.
- Health insurers should define medical necessity as those services or items that 1) are appropriate for the age and health status of the individual; 2) will prevent or ameliorate the effects of a condition, illness, injury, or disorder; 3) will aid in the overall physical and mental growth and development of the individual; and/or 4) will assist in achieving or maintaining functional capacity.5
Standards for Cost Containment
- Cost containment is essential but must not impair the quality of care delivered. Physicians must play an important role in establishing principles of evidence-based medicine, validating the measurements used, and ensuring quality in any cost-containment process.
- Responsibility for controlling costs should be a combined responsibility of employers, families, clinicians, payers, and administrators of health care plans.
- Financial incentives should be used to encourage systems that promote quality and efficiency.
- Health care financing mechanisms should encourage delivery of services in the most medically appropriate and cost-effective setting.
- Alternative health care financing mechanisms should be evaluated carefully before assuming that they are relevant to the needs of children. Because Medical Savings Accounts include economic disincentives for preventive care and favor higher income groups financially, which include disproportionately fewer children, the AAP opposes Medical Savings Accounts as a cost-containment mechanism.
- Cost sharing should not be applied to preventive and/or health supervision services.
COMMITTEE ON CHILD HEALTH FINANCING, 1997-1998
Stephen Berman, MD, Chairperson
Joseph Bogdan, MD
John Curran, MD
Neal Halfon, MD, MPH
Beverly Koops, MD
Thomas McInerny, MD
Maria Minon, MD
Richard Nelson, MD
Jean Wright, MD
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FOOTNOTES |
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The recommendations in this statement do not indicate an exclusive course of treatment or serve as a standard of medical care. Variations, taking into account individual circumstances, may be appropriate.
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ABBREVIATIONS |
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AAP, American Academy of Pediatrics; SCHIP, State Children's Health Insurance Program.
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REFERENCES |
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American Academy of Pediatrics, Committee on Child Health Financing
Implementation principles and strategies for Title XXI (State Children's Health Insurance Program).
Pediatrics.
1998;
101:944-948
[Abstract/Free Full Text] -
American Academy of Pediatrics, Ad Hoc Task Force on Definition of the Medical Home
The medical home.
Pediatrics
1992;
90:774
[Abstract/Free Full Text] - Balanced Budget Act, 1997, Public Law 105-33, Section 4704 (b)(2)(C)
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American Academy of Pediatrics, Committee on Child Health Financing
Scope of health care benefits for newborns, infants, children, adolescents, and young adults through age 21 years.
Pediatrics
1997;
100:1040-1041
[Abstract/Free Full Text] - Berman S A pediatric perspective on medical necessity. Arch Pediatr Adolesc Med 1997; 51:858-859
Pediatrics (ISSN 0031 4005). Copyright ©1998 by the American Academy of Pediatrics
The following policy statement is a revision:
- Principles of Child Health Care Financing
- Committee on Child Health Financing
Pediatrics 2003 112: 997-999.[Abstract] [Full Text] [PDF]
This article has been cited by other articles:
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  Committee on Child Health Financing Guiding Principles for Managed Care Arrangements for the Health Care of Newborns, Infants, Children, Adolescents, and Young Adults Pediatrics, January 1, 2000; 105(1): 132 - 135. [Abstract] [Full Text] [PDF]
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