CMS released the latest in a series of state health official letters providing guidance on CHIPRA implementation. This seventh letter focuses on the new mandatory dental provisions for separate CHIP programs, as well as the option these states have to provide a stand-alone dental plan to children who are insured or underinsured but would otherwise qualify for CHIP. Both provisions are effective October 1, 2009. These provisions do not impact states that provide CHIP coverage through a Medicaid expansion program.

The addition of dental standards is considered one of the victories in CHIPRA since receiving dental care is without a doubt critical to the healthy development of children. With tooth decay as the most prevalent childhood infectious disease, the omission of mandated dental coverage in CHIP has been a significant oversight.

Although all states provided some level of dental services in CHIP there were often service or dollar limitations. Now states must provide “coverage of dental services necessary to prevent disease and promote oral health, restore oral structures to health and function, and treat emergency conditions.” States have two options for providing this coverage:

• States can translate this requirement into a defined set of benefits that includes medically necessary services within specific categories. This may prove a bit tricky as the burden is on states to demonstrate that their package meets the intent of the statute.

• Alternatively, states can provide benefits equal to one of three benchmark plans: either the dental coverage in the most popular federal or state employee plan, or the state commercial plan with the highest non-Medicaid enrollment. Note that there is no option for proving actuarial equivalence (as there is for CHIP medical benefits).

Regardless of the option chosen, the cost-sharing requirements must meet CHIP rules. States cannot impose cost-sharing for preventive and diagnostic services and the cost-sharing for both medical and dental services can be no more than 5% of family income.

States also now have the option to provide a stand-alone dental plan for children who are income-eligible for CHIP but who have private medical coverage that has limited or no dental benefits. States that elect to offer this coverage must offer the same (and not more favorable) dental benefit plan as is provided to CHIP enrollees. For children with some dental coverage, this plan can serve as a “wrap,” filling in gaps as a secondary payer to their private coverage. In order to offer a stand-alone plan, states must not maintain a waiting list or set a numerical limitation on the number of children enrolled in CHIP. In addition, the 5% cost-sharing cap on total medical and dental services also applies, which may represent a challenge since the state may not have access to information about a family’s cost-sharing in their private insurance. As such, this may present a sizeable administrative barrier.

Despite the recent guidance, some questions remain. For example, must cost-sharing above any aggregate or maximum cap on benefits (as are common in commercial plans) be counted toward the 5% maximum cost-sharing? While the provisions are effective October 1, 2009, are states with pre-existing managed care plans required to modify their current contracts to come into compliance immediately or at contract renewal? As is common with federal policy, we continue to peel back the multiple layers of intepretation in search of definitive answers states need to fulfill the promise of CHIPRA.