Under current law, every managed care plan is required to have an internal
grievance procedure under which an enrollee may submit a written grievance and
a grievance panel must investigate the grievance and, if appropriate, take corrective
action. This bill requires every insurer that issues a health benefit plan to have such
an internal grievance procedure. In addition, the bill requires every insurer that
issues a health benefit plan, including a managed care plan or a plan covering state
and municipal employes, to have an independent review procedure for review of
certain decisions that are adverse to insureds. The decision must relate to the
insurer's denial of treatment or payment for treatment that the insurer determined

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was experimental or to the insurer's denial, reduction or termination of a health care
service or payment for a health care service, including admission to or continued stay
in a health care facility, on the basis that the health care service did not meet the
plan's requirements for medical necessity or appropriateness, health care setting or
level of care or effectiveness. In order to be eligible for independent review, the
amount of the reduction or the cost or expected cost of the denied or terminated
service must be at least $250, which may be increased or decreased by the
commissioner of insurance (commissioner) based on changes in the consumer price
index. Generally, an insured must request independent review within four months
after receiving notice of an adverse decision on his or her grievance under the
internal grievance procedure.

Under the bill, an independent review may be conducted only by an
independent review organization that has been certified by the commissioner. A
certified independent review organization must be recertified every two years to
continue to conduct independent reviews. The commissioner may revoke, suspend
or limit the certification of an independent review organization for various reasons
specified in the bill. Clinical peer reviewers, who conduct the reviews on behalf of
independent review organizations, must be health care providers who satisfy
specified criteria, including having expertise through current, actual clinical
experience in treating the condition that is the subject of the review. The insured
selects the independent review organization that will conduct the review.

Generally, an insured must exhaust the internal grievance procedure under the
health benefit plan before he or she may request independent review. Exceptions are
if the insured and insurer agree to bypass the internal grievance procedure or if the
insured submits a request to the independent review organization for a bypass and
the independent review organization determines that requiring the insured to use
the internal grievance procedure would jeopardize the life or health of the insured
or the insured's ability to regain maximum function.

To request an independent review, an insured must provide written notice of the
request, and of the independent review organization selected, to the insurer issuing
the health benefit plan, which must inform the commissioner and the independent
review organization of the request. The insured must pay $25 to the independent
review organization, which is refunded by the insurer to the insured if he or she
prevails, in whole or in part, in the independent review. In addition, the insurer must
pay a fee to the independent review organization for each review.

Within three days after receiving the notice from the insured, the insurer must
send to the independent review organization all of the information that it used in
making the determination in the internal grievance procedure. No later than five
days after receiving that information, the independent review organization may
request more information from either or both parties, who have five more days in
which to supply the requested information. The independent review organization
may consider, however, any other relevant information, and any information that a
party provides to the independent review organization must also be provided to the
other party. Within 30 days after the expiration of all relevant time limits in the
matter, the independent review organization must make a determination on the

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basis of the written information submitted by the parties. If an expedited review is
required because of the insured's medical condition, all specified time limits are
shortened, and the independent review organization must make a determination
within 72 hours after the expiration of all relevant time limits in the matter. The bill
specifies certain review standards for independent review organizations, including
under what circumstances treatment that was considered experimental by the
insurer issuing the health benefit plan must be covered. The decision at the
conclusion of an independent review, which is binding on the insured and the insurer,
must be in writing and served on both parties.

The bill contains prohibitions aimed at avoiding conflicts of interest for
independent review organizations, such as prohibiting an independent review
organization from owning, controlling or being a subsidiary of a health benefit plan
or an association of health benefit plans. The bill also provides independent review
organizations and clinical peer reviewers with immunity from liability for decisions
made in independent reviews.

The bill requires the commissioner to promulgate rules relating to such topics
as the application procedures and standards for certification and recertification of
independent review organizations, additional procedures and processes that
independent review organizations must use in independent reviews, standards for
the practices and conduct of independent review organizations and additional
standards related to conflicts of interest. The commissioner must also approve, on
the basis of reasonableness, fees that independent review organizations charge for
conducting independent reviews.

Finally, the bill requires the commissioner to determine when at least one
independent review organization has been certified that is able to effectively provide
the independent reviews required under the bill. When the commissioner makes
that determination, the commissioner must publish a notice in the Wisconsin
Administrative Register that specifies a date that is two months after the
determination is made. That date is the date on which the independent review
procedure must begin operating.