Wisconsin Legislature: SB380,4,4

1997 - 1998 LEGISLATURE

1997 Senate BILL 380

December 17, 1997 - Introduced by Senators Roessler, Wirch, Rosenzweig, C.
Potter, Schultz, Wineke, Welch, Clausing, Drzewiecki, Darling and Panzer,
cosponsored by Representatives Ladwig, Wasserman, R. Potter, Urban,
Johnsrud, Bock, Gunderson, Black, Brandemuehl, Robson, Ward, Linton,
Kaufert, Travis, Seratti, Baldwin, Lorge, Baumgart, Dobyns, Hebl, Hahn, J.
Lehman, Musser, Notestein, Ourada, Ryba, Owens and Vander Loop.
Referred to Committee on Health, Human Services, Aging, Corrections,
Veterans and Military Affairs.

SB380,1,14 1An Act to repeal 609.01 (1); to amend 51.20 (7) (am), 601.42 (1g) (d), 609.01 (2),
2609.01 (3), 609.01 (4), 609.01 (7), 609.05 (1), 609.05 (2), 609.05 (3), 609.10 (1) (a),
3609.15 (1) (intro.), 609.15 (1) (a), 609.15 (1) (b), 609.15 (2) (a), 609.15 (2) (b),
4609.17, 609.20 (intro.), 609.20 (1), 609.20 (2), 609.20 (4), 609.65 (1) (intro.),
5609.65 (1) (a), 609.65 (1) (b) (intro.), 609.65 (1) (b) 1., 609.65 (1) (b) 2., 609.65 (2),
6609.65 (3), 609.655 (2), 609.655 (5) (a), 609.655 (5) (b), 609.70, 609.75, 609.80,
7609.81, 609.91 (1) (intro.), 609.91 (1) (b) 2., 609.91 (1) (b) 3., 609.91 (1m), 609.91
8(2), 609.91 (3), 609.91 (4) (intro.), 609.91 (4) (a), 609.91 (4) (b), 609.91 (4) (c),
9609.91 (4) (cm), 609.91 (4) (d), 609.92 (5), 609.94 (1) (b), 645.69 (1), 645.69 (2),
10646.31 (1) (d) 8. and 646.31 (1) (d) 9.; to repeal and recreate 40.51 (12), 609.01
11(1d), 609.01 (5) and 609.01 (6); and to create 40.51 (13), 609.01 (1c), 609.01 (1p),
12609.01 (3c), 609.01 (3m), 609.01 (3r), 609.01 (4m), 609.22, 609.24, 609.26,
13609.28, 609.30, 609.32, 609.34, 609.36 and 609.38 of the statutes; relating to:
14requirements for managed care plans and granting rule-making authority.

Analysis by the Legislative Reference Bureau

Current law contains certain requirements that apply to health maintenance
organizations, preferred provider plans and limited service health organizations
(managed care plans). Those requirements address when an employer must offer a

standard plan in addition to a managed care plan, coverage under a managed care
plan for a child who is away at school, reporting disciplinary action taken against a
participating provider and a grievance procedure. This bill provides for additional
requirements which, in general, benefit enrollees under managed care plans and
providers that provide health care services on behalf of those plans.

The bill requires a managed care plan to ensure that enrollees have adequate
access to health care services by including a sufficient number and sufficient types
of primary care providers throughout the service area of the plan. The plan must
cover the services of nonparticipating specialist physicians for those enrollees who
have medical conditions that cannot be adequately treated by participating
providers. A managed care plan must provide enrollees with 24-hour telephone
access for emergency care and authorization for care. A managed care plan must
cover emergency care and may not require prior authorization for such care.

A managed care plan must permit an enrollee to choose a primary provider from
a diverse list of participating providers. An enrollee with special medical needs must
be able to select a specialist physician as a primary provider. A managed care plan
must cover 2nd opinions from participating providers and must offer a
point-of-service option under which an enrollee may obtain covered services from
one or more nonparticipating providers of the enrollee's choice.

A managed care plan must provide coverage for any drug or device that is
approved by the federal food and drug administration, as long as it is determined to
be medically appropriate and necessary by the treating physician, regardless of
whether the drug or device is being used for the purpose for which approved by the
federal food and drug administration. The treating physician must be able to
determine the drug therapy that is appropriate for the enrollee. A managed care
plan must establish a drug utilization review program for the purpose of ensuring
appropriate drug therapies for enrollees.

If a managed care plan limits coverage for experimental treatment, the plan
must disclose who is authorized to make a determination on limiting coverage and
the criteria used to determine whether a treatment, procedure, drug or device is
experimental. Whenever coverage for experimental treatment is denied, the plan
must provide the enrollee with a denial letter that advises the enrollee of who made
the coverage decision, the reasons for the denial, alternative treatments that would
be covered under the plan and the plan's grievance and appeal procedures.

A managed care plan must establish an internal quality assurance program, a
peer review process and processes for selecting participating providers and
reevaluating those providers after initial acceptance into the plan. A managed care
plan must appoint a physician as medical director to be responsible for the treatment
policies, protocols, quality assurance activities and utilization management
decisions of the plan.

A managed care plan must inform enrollees of any financial arrangement
between the plan and a participating physician that operates as an incentive or
bonus for restricting services. In addition, a managed care plan may not penalize or
terminate the contract of a participating provider for discussing with an enrollee
financial incentives under the plan. A managed care plan may not penalize or

terminate the contract of a participating provider for making referrals to other
participating providers or for discussing medically necessary or appropriate care
with an enrollee.

Under current law, the commissioner of insurance is required to promulgate
rules for preferred provider plans to ensure that enrollees are not forced to travel
excessive distances to receive health care services and to ensure continuity of care
for enrollees. The bill requires those rules to apply more broadly to all managed care
plans.

For further information see the state and local fiscal estimate, which will be
printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:

SB380, s. 1 1Section 1. 40.51 (12) of the statutes is repealed and recreated to read:

SB380,3,32 40.51 (12) Every managed care plan, as defined in s. 609.01 (3c), that is offered
3by the state under sub. (6) shall comply with ch. 609.

SB380, s. 2 4Section 2. 40.51 (13) of the statutes is created to read:

SB380,3,65 40.51 (13) Every managed care plan, as defined in s. 609.01 (3c), that is offered
6by the group insurance board under sub. (7) shall comply with ch. 609.

SB380, s. 3 7Section 3. 51.20 (7) (am) of the statutes is amended to read:

SB380,3,148 51.20 (7) (am) A subject individual may not be examined, evaluated or treated
9for a nervous or mental disorder pursuant to a court order under this subsection
10unless the court first attempts to determine whether the person is an enrolled
11participant enrollee of a health maintenance organization, limited service health
12organization or preferred provider plan, as defined in s. 609.01 (4), and, if so, notifies
13the organization or plan that the subject individual is in need of examination,
14evaluation or treatment for a nervous or mental disorder.

SB380, s. 4 15Section 4. 601.42 (1g) (d) of the statutes is amended to read:

SB380,4,416 601.42 (1g) (d) Statements, reports, answers to questionnaires or other
17information, or reports, audits or certification from a certified public accountant or

1an actuary approved by the commissioner, relating to the extent liabilities of a health
2maintenance organization insurer are or will be covered liabilities, as defined in s.
3609.01 (1) liabilities for health care costs for which an enrollee or policyholder of the
4health maintenance organization insurer is not liable to any person under s. 609.91.

SB380, s. 5 5Section 5. 609.01 (1) of the statutes is repealed.

SB380, s. 6 6Section 6. 609.01 (1c) of the statutes is created to read:

SB380,4,117 609.01 (1c) "Emergency medical condition" means a medical condition of a
8person that has a sudden onset and that manifests itself by symptoms of sufficient
9severity, including severe pain, to lead a prudent layperson who possesses an average
10knowledge of health and medicine to reasonably conclude that a lack of immediate
11medical attention might result in any of the following:

SB380,4,1212 (a) Serious jeopardy to the person's health.

SB380,4,1313 (b) Serious impairment to the person's bodily functions.

SB380,4,1414 (c) Serious dysfunction of any of the person's bodily organs or parts.

SB380, s. 7 15Section 7. 609.01 (1d) of the statutes is repealed and recreated to read:

SB380,4,1716 609.01 (1d) "Enrollee" means, with respect to a managed care plan, a person
17who is entitled to receive health care services under the plan.

SB380, s. 8 18Section 8. 609.01 (1p) of the statutes is created to read:

SB380,4,2219 609.01 (1p) "Health care professional" means any individual licensed,
20registered, permitted or certified by the department of health and family services or
21the department of regulation and licensing to provide health care services, items or
22supplies in this state.

SB380, s. 9 23Section 9. 609.01 (2) of the statutes is amended to read:

SB380,5,424 609.01 (2) "Health maintenance organization" means a health care plan
25offered by an organization established under ch. 185, 611, 613 or 614 or issued a

1certificate of authority under ch. 618 that makes available to its enrolled
2participants enrollees, in consideration for predetermined periodic fixed payments,
3comprehensive health care services performed by providers selected by the
4organization participating in the plan.

SB380, s. 10 5Section 10. 609.01 (3) of the statutes is amended to read:

SB380,5,116 609.01 (3) "Limited service health organization" means a health care plan
7offered by an organization established under ch. 185, 611, 613 or 614 or issued a
8certificate of authority under ch. 618 that makes available to its enrolled
9participants enrollees, in consideration for predetermined periodic fixed payments,
10a limited range of health care services performed by providers selected by the
11organization participating in the plan.

SB380, s. 11 12Section 11. 609.01 (3c) of the statutes is created to read:

SB380,5,1413 609.01 (3c) "Managed care plan" means a health maintenance organization,
14limited service health organization or preferred provider plan.

SB380, s. 12 15Section 12. 609.01 (3m) of the statutes is created to read:

SB380,5,1816 609.01 (3m) "Participating" means, with respect to a physician or other
17provider, under contract with a managed care plan to provide health care services,
18items or supplies to enrollees of the plan.

SB380, s. 13 19Section 13. 609.01 (3r) of the statutes is created to read:

SB380,5,2020 609.01 (3r) "Physician" has the meaning given in s. 448.01 (5).

SB380, s. 14 21Section 14. 609.01 (4) of the statutes is amended to read:

SB380,6,222 609.01 (4) "Preferred provider plan" means a health care plan offered by an
23organization established under ch. 185, 611, 613 or 614 or issued a certificate of
24authority under ch. 618 that makes available to its enrolled participants enrollees,
25for consideration other than predetermined periodic fixed payments, either

1comprehensive health care services or a limited range of health care services
2performed by providers selected by the organization participating in the plan.

SB380, s. 15 3Section 15. 609.01 (4m) of the statutes is created to read:

SB380,6,54 609.01 (4m) "Primary care physician" means a physician specializing in family
5medical practice, general internal medicine, obstetrics and gynecology or pediatrics.

SB380, s. 16 6Section 16. 609.01 (5) of the statutes is repealed and recreated to read:

SB380,6,87 609.01 (5) "Primary provider" means a participating health care professional
8who coordinates, supervises and may provide ongoing care to an enrollee.

SB380, s. 17 9Section 17. 609.01 (6) of the statutes is repealed and recreated to read:

SB380,6,1110 609.01 (6) "Specialist physician" means a physician who is not a primary care
11physician.

SB380, s. 18 12Section 18. 609.01 (7) of the statutes is amended to read:

SB380,6,1413 609.01 (7) "Standard plan" means a health care plan other than a health
14maintenance organization or a preferred provider that is not a managed care plan.

SB380, s. 19 15Section 19. 609.05 (1) of the statutes is amended to read:

SB380,6,1916 609.05 (1) Except as provided in subs. (2) and (3), a health maintenance
17organization, limited service health organization or preferred provider managed
18care plan shall permit its enrolled participants enrollees to choose freely among
19selected participating providers.

SB380, s. 20 20Section 20. 609.05 (2) of the statutes is amended to read:

SB380,6,2421 609.05 (2) A health care plan under sub. (1) Subject to s. 609.24 (2) and (3), a
22managed care plan may require an enrolled participant enrollee to designate a
23primary provider and to obtain health care services from the primary provider when
24reasonably possible.

SB380, s. 21 25Section 21. 609.05 (3) of the statutes is amended to read:

SB380,7,5

1609.05 (3) Except as provided in ss. 609.65 and 609.655, a health managed care
2plan under sub. (1) may require an enrolled participant enrollee to obtain a referral
3from the primary provider designated under sub. (2) to another selected
4participating provider prior to obtaining health care services from the other selected
5that participating provider.

SB380, s. 22 6Section 22. 609.10 (1) (a) of the statutes is amended to read:

SB380,7,127 609.10 (1) (a) Except as provided in subs. (2) to (4), an employer that offers any
8of its employes a health maintenance organization or a preferred provider plan that
9provides comprehensive health care services shall also offer the employes a standard
10plan, as provided in pars. (b) and (c), that provides at least substantially equivalent
11coverage of health care expenses and that is not a health maintenance organization
12or a preferred provider plan.

SB380, s. 23 13Section 23. 609.15 (1) (intro.) of the statutes is amended to read:

SB380,7,1614 609.15 (1) (intro.) Each health maintenance organization, limited service
15health organization and preferred provider managed care plan shall do all of the
16following:

SB380, s. 24 17Section 24. 609.15 (1) (a) of the statutes is amended to read:

SB380,7,2018 609.15 (1) (a) Establish and use an internal grievance procedure that is
19approved by the commissioner and that complies with sub. (2) for the resolution of
20enrolled participants' enrollees' grievances with the health managed care plan.

SB380, s. 25 21Section 25. 609.15 (1) (b) of the statutes is amended to read:

SB380,7,2422 609.15 (1) (b) Provide enrolled participants enrollees with complete and
23understandable information describing the internal grievance procedure under par.
24(a).

SB380, s. 26 25Section 26. 609.15 (2) (a) of the statutes is amended to read:

SB380,8,2

1609.15 (2) (a) The opportunity for an enrolled participant enrollee to submit
2a written grievance in any form.

SB380, s. 27 3Section 27. 609.15 (2) (b) of the statutes is amended to read:

SB380,8,84 609.15 (2) (b) Establishment of a grievance panel for the investigation of each
5grievance submitted under par. (a), consisting of at least one individual authorized
6to take corrective action on the grievance and at least one enrolled participant
7enrollee other than the grievant, if an enrolled participant enrollee is available to
8serve on the grievance panel.

SB380, s. 28 9Section 28. 609.17 of the statutes is amended to read:

SB380,8,15 10609.17 Reports of disciplinary action. Every health maintenance
11organization, limited service health organization and preferred provider managed
12care plan shall notify the medical examining board or appropriate affiliated
13credentialing board attached to the medical examining board of any disciplinary
14action taken against a selected participating provider who holds a license or
15certificate granted by the board or affiliated credentialing board.

SB380, s. 29 16Section 29. 609.20 (intro.) of the statutes is amended to read:

SB380,8,19 17609.20 Rules for preferred provider managed care plans. (intro.) The
18commissioner shall promulgate rules applicable to preferred provider plans relating
19to managed care plans for all of the following purposes:

SB380, s. 30 20Section 30. 609.20 (1) of the statutes is amended to read:

SB380,8,2221 609.20 (1) To ensure that enrolled participants enrollees are not forced to travel
22excessive distances to receive health care services.

SB380, s. 31 23Section 31. 609.20 (2) of the statutes is amended to read:

SB380,8,2524 609.20 (2) To ensure that the continuity of patient care for enrolled participants
25enrollees is not disrupted.

SB380, s. 32

1Section 32. 609.20 (4) of the statutes is amended to read:

SB380,9,92 609.20 (4) To ensure that employes offered a health maintenance organization
3or a preferred provider plan that provides comprehensive services under s. 609.10
4(1) (a) are given adequate notice of the opportunity to enroll and complete and
5understandable information under s. 609.10 (1) (c) concerning the differences
6between the health maintenance organization or preferred provider plan and the
7standard plan, including differences between providers available and differences
8resulting from special limitations or requirements imposed by an institutional
9provider because of its affiliation with a religious organization.

SB380, s. 33 10Section 33. 609.22 of the statutes is created to read: