Table 4.

Defining payer or payment systems involved with child healthcare.

Payer or System	Definition
Medicaid	Medicaid is a joint federal and state program that helps low-income individuals or families pay for the costs associated with long-term medical and custodial care. The range of Medicaid income eligibility level is 133–375% of the Federal Poverty Level. Although largely funded by the federal government, Medicaid is run by the state where coverage, delivery systems, and administration may vary. All children enrolled in Medicaid are entitled to the comprehensive set of healthcare services known as Early, Periodic Screening, Diagnosis and Treatment (EPSDT)—see supplemental information.
Children’s Health Insurance Program (CHIP) & Medicaid Managed Care	The income eligibility level is determined by the individual state, and the range of CHIP income eligibility level for children is 170–400% of the Federal Poverty Level. CHIP provides for the delivery of Medicaid health benefits and additional services that are paid directly by state Medicaid or through contracted arrangements between state Medicaid agencies and managed care organizations (MCOs). The MCOs agree to accept a set per member per month (capitation) payment for these services. These services are typically narrower in scope of coverage because insurers are given discretion to define medical necessity and the terms of coverage exclusion. Families can incur co-payments and monthly premiums but these premiums can’t exceed 5% of family’s annual income. By contracting with various types of MCOs to deliver healthcare services to their beneficiaries, states can reduce Medicaid program costs and better manage utilization of health services. Improvement in health plan performance, healthcare quality, and outcomes are key objectives of CHIP.
Commercial	Commercial health insurance is any type of health insurance that is not offered and managed by a government entity. Companies that sell this type of insurance are for-profit corporations and offer their insurance services through group insurance plans as well as individual or personal plans. In all situations, a commercial insurance of this type is available only to those who are willing to pay premiums in exchange for the coverage. These plans also have coverage that is narrower than the benefits available under Medicaid. Many people have access to commercial health insurance purchased for them by their employer. Dependents (e.g., children) of employees are included in their health insurance benefits.
Accountable Care Organizations (ACO)	An ACO is a healthcare organization characterized by a payment and care delivery model that seeks to tie provider reimbursements to quality metrics and reductions in the total cost of care for an assigned population of patients. A group of coordinated healthcare providers forms an ACO, which then provides care to a group of patients. They may use a range of payment models (e.g., capitation, fee-for-service with asymmetric or symmetric shared savings). They are accountable to the patients and the third-party payer for the quality, appropriateness and efficiency of the healthcare provided. Pediatric ACOs should develop relationships with community resources and schools to achieve the best health outcomes for children.
Large Employer Groups	Large employers or groups of large businesses may partner together and decide to self-insure their employees. They may use a commercial insurance plan to serve as a third party administrator but it may be leadership at the business that will determine the breadth and depth of coverage and benefits. They may also participate in ACOs at a regional level. They typically include the coverage of children as dependents. Employee wellness benefits may be covered separately, using separate contracts for lifestyle or wellness benefits that might include in-house commercial weight loss programs or separate carve outs for behavioral health.