2003 - 2004 LEGISLATURE
January 14, 2004 - Introduced by Representatives Albers, Gronemus, Gunderson,
Hahn, Hines, Krawczyk, Musser, Olsen, Ott and Seratti, cosponsored by
Senator Schultz. Referred to Committee on Health.
1An Act to repeal
149.16 (5); to renumber and amend
149.16 (1m); to amend
149.15 (3) (g) and 149.16 (title); and to create
149.142 (3), 149.16 (1m) (a) 1., 3
149.16 (1m) (a) 2., 149.16 (1m) (a) 3., 149.16 (1m) (a) 4., 149.16 (1m) (b), 149.16 4
(3m), 149.16 (4m) and 149.16 (5m) of the statutes; relating to: contracting for
5administrative services for the Health Insurance Risk-Sharing Plan.
Analysis by the Legislative Reference Bureau
The Health Insurance Risk-Sharing Plan (HIRSP) under current law provides
major medical health insurance coverage for persons who are covered under
Medicare because they are disabled, persons who have tested positive for the human
immunodeficiency virus, and persons who have been refused coverage, or coverage
at an affordable price, in the private health insurance market because of their mental
or physical health condition. Also eligible for coverage are persons who do not
currently have health insurance coverage, but who were covered under certain types
of health insurance coverage for at least 18 months in the past. HIRSP is
administered by the Department of Health and Family Services (DHFS), in
conjunction with a plan administrator and a board of governors (board). Under
current law, DHFS may select the plan administrator in a competitive bidding
This bill requires DHFS and the board to select a plan administrator together
in a competitive, request-for-proposals process. Under the bill, the board must
establish an oversight committee to assist in the awarding of administrative services
contracts. DHFS and the board, upon the recommendation of the administrative
services contracts committee, must develop and issue a request for proposals,
evaluate proposals, request and evaluate best and final offers, and select a plan
administrator and award a contract. The plan administrator contracts awarded
under the new selection process must have three-year terms running from July 1 to
June 30, but DHFS and the board may negotiate up to two one-year extensions. The
start work date of the first contract awarded under the new selection process may
not be later than July 1, 2004. The bill also provides that DHFS and the board may
together, using competitive request-for-proposals processes, award contracts for
administrative services that are not provided by the plan administrator, such as
legal and actuarial services; that all administrative services contracts are between
the board and the person providing the services under the contract; and that
administration of any contract may not be limited to a particular geographic location
in the state.
The bill makes one other change to HIRSP. Under current law, the costs of
HIRSP are paid through a combination of premiums, insurer assessments, and
health care provider payment rate discounts, all of which may be adjusted during the
plan year to cover any deficits. The bill provides that, whenever a claim is processed
for payment, any discount or later adjustment to the provider's payment rate must
be calculated and applied on a per-claim basis and disclosed on the
explanation-of-benefits form provided to the covered person and to the provider.
For further information see the state 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:
AB754, s. 1
149.142 (3) of the statutes is created to read:
Whenever a claim is processed for payment, the adjustment of a 3
provider's payment rate under sub. (1) and any adjustment under s. 149.143 or 4
149.144 shall be calculated and applied on a per-claim basis. The adjustment shall 5
be disclosed on the explanation of benefits form provided to the eligible person and 6
to the provider.
AB754, s. 2
149.15 (3) (g) of the statutes is amended to read:
(g) Establish oversight committees to address various 9
administrative issues, such as financial management of the plan and plan
10administrator, the awarding of administrative services contracts, and contract
performance standards. A representative of the department may not be the 2
chairperson of any committee established under this paragraph.
AB754, s. 3
149.16 (title) of the statutes is amended to read:
(title) Plan administrator; administrative services.
(a) (intro.) The plan administrator may shall
be selected by the 8
department and the board together
in a competitive
bidding request-for-proposals 9
process. The department and the board, upon the recommendation of the
10administrative services contracts committee established under s. 149.15 (3) (g), shall
11do all of the following:
AB754, s. 5
149.16 (1m) (a) 1. of the statutes is created to read:
(a) 1. Develop and issue a request for proposals to be used to solicit 14
AB754, s. 6
149.16 (1m) (a) 2. of the statutes is created to read:
(a) 2. Evaluate technical proposals and accompanying cost 17
proposals submitted in response to the request for proposals.
AB754, s. 7
149.16 (1m) (a) 3. of the statutes is created to read:
(a) 3. Request and evaluate best and final offers.
AB754, s. 8
149.16 (1m) (a) 4. of the statutes is created to read:
(a) 4. Select a plan administrator and award a contract for plan 22
AB754, s. 9
149.16 (1m) (b) of the statutes is created to read:
(b) 1. Any contract awarded under this subsection shall have a 25
term of 3 years, beginning on July 1 and ending on June 30 of the 3rd year beginning
after the year in which the contract commences. The start-work date of the initial 2
contract awarded under this subsection may not be later than July 1, 2004.
2. Notwithstanding subd. 1, the department and the board may negotiate not 4
more than 2 one-year extensions of a contract described under subd. 1.
3. Notwithstanding subds. 1. and 2., the department and the board may provide 6
in a contract awarded under this subsection that the contract may be extended 7
beyond its 3-year term or a one-year extension in order to facilitate the transition 8
to administration of the plan by a succeeding plan administrator.
AB754, s. 10
149.16 (3m) of the statutes is created to read:
The plan administrator shall submit regular reports to the 11
department, the board, and the committees and subcommittees established under 12
s. 149.15 (3) (g) regarding the operation of the plan. The frequency, content, form, 13
and distribution of the reports shall be determined by the department, the board, and 14
the committees and subcommittees of the board, as appropriate.
AB754, s. 11
149.16 (4m) of the statutes is created to read:
The department and the board together may award contracts for 17
administrative and other services that are not provided by the plan administrator 18
under the contract under sub. (1m), such as legal, actuarial, auditing, and 19
prescription drug benefit management services. A competitive, 20
request-for-proposals process that is consistent with the process used for awarding 21
a contract under sub. (1m) shall be used for awarding any contract under this 22
subsection. Any contract under this subsection shall be between the board and the 23
person providing services under the contract.
AB754, s. 12
149.16 (5) of the statutes is repealed.
AB754, s. 13
149.16 (5m) of the statutes is created to read:
Any contract under sub. (1m) or (4m) shall be between the board 2
and the person providing the services under the contract. All contracts under subs. 3
(1m) and (4m) shall be administered in this state but the place at which any contract 4
is administered may not be limited to a particular geographic location in the state.