PCIP State Contracts and Extension

This page contains frequently asked questions about the state contracts in the PCIP program.

1. What change did CMS make to the state-based PCIP program and contracts?
   
   CMS has proposed a revised contract to the state-based PCIPs for the next contracting period of June through December 2013.  In this revised contract, CMS proposes that state-based PCIPs work within a fixed contract amount for the remaining seven months of the program.  Prior to this point, state PCIPs could seek additional funding, beyond a contract amount, if they had cost overruns.  With seven months remaining in a program with a fixed appropriation, this new contract amount will give state PCIPs and CMS certainty about the funding available to administer their programs until people enrolled in PCIP can obtain coverage from a qualified health plan offered through the Health Insurance Marketplace beginning on January 1, 2014.  State PCIPs will have authority to make changes necessary to remain within the funding ceiling.
   
   
2. Can a state PCIP continue its program?
   
   Yes.  States can continue to administer PCIP.  In fact, the contract that CMS has proposed to the states gives them more flexibility to operate their program within the fixed amount of the contract.  Under this new contract, state PCIPs would have far more authority to make program changes, without seeking approval from CMS, as long as the changes remain consistent with the statutory authority, implementing regulations, and certificates of coverage under the state programs.
   
   
3. Is CMS dictating a specific funding amount to the state-based PCIPs?
   
   CMS has requested that state PCIPs propose a contract amount that would reasonably approximate their claims liability during these last seven months of the program.  CMS will work with states to negotiate an amount within the remaining funding available to the PCIP program.
   
   
4. Why is CMS making this contract change now?
   
   While CMS has made adjustments to premiums and benefits in the Federally-operated PCIP, it cannot do the same to the programs administered by state PCIPs. Since CMS must operate the PCIP program within the fixed $5 billion PCIP program appropriation, CMS is converting these state PCIP contracts to ensure that program costs stay within the program’s appropriation.
   
   
5. Must state PCIPs accept this contract change?
   
   No.  A state PCIP may notify CMS that it will not enter into the new modified contract.  In that case, the enrollees will be transferred into Federally-operated PCIP.  We have extended the deadline for state PCIPs to decide until Friday, May 10, 2013.
   
   
6. Will state PCIP enrollees lose coverage?
   
   No.    If a state PCIP does not agree to the contract, CMS will transition the state’s enrollees into the Federally-operated PCIP.  Enrollees will not experience any break in their health coverage and will simply be covered by the Federally-operated PCIP through December 2013.