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Effective Date: April 1, 2009

Approval Date: ____________ 13

Section 3. Methods of Delivery and Utilization Controls (Section 2102)(a)(4))

Check here if the state elects to use funds provided under Title XXI only to provide expanded eligibility under the state's Medicaid plan, and continue on to Section 4.

3.1. Describe the methods of delivery of the child health assistance using Title XXI funds to targeted low-income children. Include a description of the choice of financing and the methods for assuring delivery of the insurance products and delivery of health care services covered by such products to the enrollees, including any variations. (Section 2102)(a)(4) (42CFR 457.490(a))

Under NJ FamilyCare Plan A, the Medicaid program is expanded to include all Optional Targeted Low Income Children who meet the Title XXI requirements, are below the age of 19 years, and have family income at or below 133% of the federal poverty level. Therefore, for this group of children, the service delivery system is the Title XIX system of mandatory managed care using licensed HMOs, with certain services carved out of the managed care contracts and provided on a fee-for-service basis. The children in this group will receive the services described in Attachment 6 for Plan A.

For the Title XXI eligible children under 19 years of age with gross family income above 133% and at or below 200% of the federal poverty level (NJ FamilyCare Plans B and C) the State purchases a subset of the Medicaid package from the Title XIX program. The health benefit coverage provided under the Title XXI program consists of the managed care product offered under the Title XIX program with the addition of fee-for-service payment to existing Medicaid participating network providers for certain benefits not included in the managed care contracts, but essential to the care of this population. The children in this group will receive the services described in Attachment 6 for Plans B and C.

For the Title XXI eligible children under 19 years of age with gross family income above 200% and at or below 350% of the federal poverty level, whose net income falls at or below 200% of the federal poverty level after application of disregards (NJ FamilyCare Plan D), the State purchases a subset of the Medicaid package from the Title XIX program which consists of a version of the managed care product under the Title XIX program modified to mirror a commercial plan with the addition of fee-for-service payment to existing Medicaid participating network providers for certain benefits not included in the managed care contracts, but included in the commercial benchmark plan. The children in this group will receive the services described in Attachment 6 for Plan D.

Participation in the managed care contracts is limited to licensed HMOs and is a fully-capitated, risk-based contract. Given that the cost-sharing amounts act as an incentive payment to the direct service provider, the managed care contract