The Commissioner finds that the circumstances of insurers offering group or blanket health insurance policy require that the insurer offering the policy otherwise exempt from Chs.
600 to
646, Stats., under s.
600.01 (1) (b) 3., Stats., in order to provide adequate protection to Wisconsin enrollees and the public those insurers shall comply with s.
Ins 9.34 (2) and s.
609.22 (2), Stats., when it covers 100 or more residents of this state under a policy that is otherwise exempt under s.
600.01 (1) (b) 3., Stats.
Finally, the proposed rule includes several new definitions of terms that were requested by the industry to assist in clarifying relationships between insurers and providers and to clarify what entities are subject to specific requirements.
The proposed rule would be enforced under ss.
601.41,
601.64,
601.65, Stats., or ch.
645, Stats., or any other enforcement provision of chs.
600 to
646, Stats. This proposed rule includes a significantly delayed applicability date to give insurers amply time to comply with the various provisions including sufficient time to submit to the OCI forms for approval prior to use.
6. Summary of and preliminary comparison with any existing or proposed federal regulation that is intended to address the activities to be regulated by the proposed rule:
There is no existing or proposed federal regulation that is intended to address the issues presented within the proposed rule. There is federal regulation for issuers of Medicare Advantage, a means of delivering Medicare Part A and B benefits through preferred provider organizations, formally known as Medicare + Choice. States are preempted from regulating issuers of Medicare Advantage, however the Centers for Medicare & Medicaid did provide regulations that included access requirements which are similar to the requirements incorporated in the OCI proposed rule
7. Comparison of similar rules in adjacent states as found by OCI:
Iowa: Iowa statute §514C.16, requires a carrier which provides coverage for emergency services to be responsible for charges for emergency services furnished outside any contractual provider network or preferred provider network for covered individuals. Iowa Administrative Code s. 191-27.4 (1)(a), requires a health benefit plan which provides for incentives for covered persons to use the health care services of a preferred provider to contain a provision that if a covered person receives emergency services specified in the preferred provider arrangement and cannot reasonably reach a preferred provider, emergency services rendered during the course of the emergency will be reimbursed as though the covered person had been treated by a preferred provider, subject to any restrictions which may govern payment by a preferred provider for emergency services. Iowa statute §514B and Administrative Code 191-40.21, require HMOs to reimburse a provider of emergency services after a review of the care and may not deny reimbursement solely on the grounds that the services were provided by non-contracted providers.
Iowa statute §514F.3 requires the commissioner of insurance to adopt rules for preferred provider contracts and organizations and to adopt rules related to preferred provider arrangements. Iowa statute §514K.1 requires HMOs, organized delivery systems or an insurer using a preferred provider arrangement to provide to its enrollees written information that at a minimum must include the following; a description of the plan's benefits and exclusions, enrollee cost-sharing requirements, list of participating providers, disclosure of drug formularies, explanation for accessing emergency care services, policy for addressing investigational or experimental treatments, methodologies used to compensate providers, performance measures as determined by the commissioner and information on how to access internal and external grievance procedures. In addition the Iowa department must annually publish a consumer guide providing a comparison by plan on performance measures, network composition, and other key information to enable consumers to better understand plan differences.
Iowa Administrative Code 191-27.3 (1), requires preferred provider arrangements to establish the amount and manner of payment to a preferred provider, the mechanisms designed to minimize cost of the health benefits plan and ensure reasonable access to covered services under the preferred provider arrangement. Iowa Administrative Code 191-27.4 (1) (b), requires preferred provider plans to contain a provision that clearly identifies the differentials in benefit levels for health care services of preferred providers and non-preferred providers. Iowa Administrative Code 191-27.4 (2), requires that if a health benefit plan provides difference in benefit levels payable to preferred providers compared to other providers, such difference shall not unfairly deny payment for covered services and shall be no greater than necessary to provide a reasonable incentive for covered persons to use the preferred provider.
Illinois: Illinois statutory code 215 ILCS 5/370o, requires any preferred provider contract to provide the enrollee emergency care coverage regardless of whether the emergency care is provided by a preferred or non-preferred provider and the coverage shall be at the same benefit level as if the service or treatment had been rendered by a plan provider. Section 215 ILCS 5/370i, sec. (a) prohibits policies from containing provisions that would unreasonably restrict the access and availability of health care services for the enrollee. Section 215 ILCS 134/40, sec. 40 (d) requires health care plan to pay for services of a specialist with the enrollee only responsible for the services as though the services were provided by an in-network provider when the plan does not have the specialist that the enrollee needs for the care of an on-going specific condition. The primary care physician arranges for the enrollee to see a specialist that is within a reasonable distance and travel time and the primary provider notifies the plan of the referral.
The information required to be provided to consumers are contained in s. 215 ILCS 134/15, that requires annual reporting of participating health care providers in the plan's service area and in addition to basic terms of the plan, includes disclosure of out-of-area coverage, if any, financial responsibility of enrollees including co-payments, deductibles, premium and any other out-of-pocket expenses, continuity of care, appeal rights and mandated benefits. Illinois Administrative Code s. 5420.40, requires disclosure so that a person can compare the attributes of various health care plans based upon a description of coverage. This disclosure includes that 2 appendices are completed that detail specific copayments, deductibles, and other cost-sharing provisions for services that must be included with the policy for consumer information.
In addition to the worksheets that provide consumers with detailed information, Illinois statutory code s. 215ILCS 5/356z.2, also requires an insurer that issues or renews a individual or group accident and health policy and arranges, contracts with or administers contracts with providers whereby the beneficiary are provided an incentive to use the services of such provider must include the following disclosure of limited benefits in its contracts and evidence of coverage:
WARNING, LIMITED BENEFITS WILL BE PAID WHEN NON-PARTICIPATING PROVIDERS ARE USED. You should be aware that when you elect to utilize the services of a non-participating provider for a covered service in non-emergency situations, benefit payments to such non-participating provider are not based upon the amount billed. The basis of your benefit payment will be determined according to your policy's fee schedule, usual and customary charge (which is determined by comparing charges for similar services adjusted to the geographical are where the services are performed), or other method as defined by the policy. YOU CAN EXPECT TO PAY MORE THAN THE COINSURANCE AMOUNT DEFINED IN THE POLICY AFTER THE PLAN HAS PAID ITS REQUIRED PORTION. Non-participating providers may bill members for any amount up to the billed charge after the plan has paid its portion of the bill. Participating providers have agreed to accept discounted payment for services with no additional billing to the member other than co-insurance and deductible amounts. You may obtain further information about the participating status of professional providers and information on out-of-pocket expenses by calling the toll free telephone number on your identification card. (Emphasis in original.)
Illinois statute s. 215 ILCS 134/80 requires health care plans have procedures for quality assessment program including in s. (3) and (4) that require plans have a procedure for remedial action to correct quality problems that have been verified in accordance with the written plan's methodology and criteria, including written procedures for taking appropriate corrective action and follow-up measures implemented to evaluate the effectiveness of the action plan.
Illinois Administrative Code s. 5420.50 requires that all provider agreements contain provisions providing for advance notice from providers when terminating from the plan and requirements that the plan notify affected enrollees on a timely basis. The notice provided to the enrollee must contain information on how enrollees are to select a new health care provider.
Minnesota: Minnesota statute s. 62A.049, prohibits an accident and sickness policy from requiring prior authorization in cases of emergency confinement or emergency treatment. The enrollee or authorized representative must notify the insurer as soon as reasonably possible. Section 62Q.55 requires managed care organizations including preferred provider organization, to provide enrollees with available and accessible emergency services. Services shall be covered whether provided by participating or nonparticipating providers and whether provided within or outside the health plan's service area. Section 62D.20 and s. 4685.0700, Minnesota Administrative Code, require HMOs to provide out-of-area services including for emergency care.
Minnesota statute s. 62Q.49 (subd. 2) (a), requires all health plans to clearly specify how the cost of health care used to calculate any co-payments, coinsurance or lifetime benefits will be affected by the contracting in which health care providers agree to accept discounted charges. Section 62Q.49, further any marketing or summary materials must prominently disclose and clearly explain the provisions relating to co-payments, coinsurance or maximum lifetime benefits.
Minnesota statute s. 62Q.58, requires that if an enrollee receives services from a nonparticipating specialist because a participating specialist is not available, the services must be provided at no additional cost to the enrollee beyond what the enrollee would otherwise pay for services received from a participating specialist.
Minnesota statute s. 62Q.746, permits the department to request and the health plan to provide the following information including how the plan determines who are eligible to participating in the network, the number of full-time equivalent physicians, by specialty, non-physician providers and allied health providers used to provide services and summary data that is broken down by type of provider reflecting actual utilization of network and non-network practitioners and allied professionals by enrollees of the plan.
Michigan: Michigan statute s.
500.3406k, requires an expense-incurred hospital, medical or surgical policy that provides coverage for emergency health services, including an HMO plan, shall provide coverage for medically necessary services provide to an enrollee for the sudden onset of a medical condition that manifests itself by signs and symptoms of sufficient severity, that the absence of immediate care could reasonably be expected to result in serious jeopardy to health without prior authorization.
Insurers that contract with providers are governed by the Prudent Purchaser Act of 1984 including preferred provider organization (MCL 550.50 et seq.). The organization that contracts with providers shall annually report to the commissioner basic utilization of the providers (MCL 550.56). Under MCL 550.53, organizations that contract with providers to control costs and utilization may limit the number of providers to the number necessary to assure reasonable levels of access to health care services, located within reasonable distance.
8. A summary of the factual data and analytical methodologies that OCI used in support of the proposed rule and how any related findings support the regulatory approach chosen for the proposed rule:
The rule as drafted by OCI is intended to ensure enrollee access to health care services, ensure continuity of health care and ensure that enrollees fully understand the products offered including deductibles, co-payment and other cost-sharing measures that when combined with premium payments will permit the enrollee to make better product selection and provider choices. The proposed rule achieves these goals while recognizing the differences between preferred provider plans and defined network plans. In addition to the statutory amendments necessitating the rule, the OCI identified several key consumer and regulatory issues through a review of complaints filed with the agency involving insurers offering preferred provider plans (PPOs) that the proposed rule addresses through required disclosures to enrollees, disclosure to the OCI, coverage of emergency services and adequate access to participating providers.
The complaint review involved complaints filed for the period January 1, 2003 through May 31, 2004. The OCI reviewed only complaints identified in the agency data system as group health coverage. The OCI identified 936 PPO complaints. These complaints involved claim administration (83%), marketing (2%), underwriting (9%), policyholder service (5%) and “other" complaints (1%).
The OCI found that 33 complaints involved ancillary providers. These complaints involve PPO plans that have participating provider contracts with hospitals but do not have contracts with the anesthesiologists, radiologists, pathologists and emergency medicine physicians associated with in-network hospitals. Enrollees either were not aware that the ancillary providers were non-participating providers or did not have an option but to use the non-participating providers due to location or medical necessity. The result to these enrollees was significant out-of-pocket expenses as some PPOs have 30% or more differential between participating and non-participating providers and may also have higher co-payments or other cost-sharing provisions when services are performed by non-participating providers.
During this same period of time, the OCI identified 15 complaints involving emergency services that were subject to non-participating deductibles and co-payments. Although some insurers waive the deductible and co-payments billed by nonparticipating providers for rendering emergency care services, many insurers leave enrollees financially responsible for significant, unexpected, medical expenses.
The OCI also identified 19 complaints that involved changes in the provider networks, 2 complaints involving limits in the available participating network, 18 involving the enrollee's lack of understanding of PPO plan requirements with 71 complaints grouped under the heading of “other" which includes UCR determinations, and pre-certification or pre-authorization issues.
In addition the complaint review, the OCI in a cooperative effort of the Commissioner met with representatives from the insurance industry. Since November 2004, four public working meetings have been held to discuss each section of the proposed rule. Each public meeting was attended by the Commissioner and his staff and representatives from the Wisconsin Association of Life and Health Insurer, Council for Affordable Healthcare and Wisconsin Association of Provider Networks as well as representatives from no less than seven (7) domestic and non-domestic health insurers. Additional work groups comprised of representative from industry and the Office met two additional times to work on the ancillary provider language and criteria for preferred provider plans. Participants in the open meetings were invited to comment and make recommendations or specific modifications to the proposed rule. Candid discussion provided both Commissioner and the industry opportunity to voice support or concerns over each section of the rule. The public working meetings also gave both industry and the Commissioner the opportunity to share its respective views of the marketplace. Discussion often focused on how proposed and revised language affects the industry and its ability to function in the marketplace with the guiding statutory requirements and consumer concerns as reflected in complaints received by the OCI to maintain the proper balance in the proposed regulations. At each meeting revisions that had previously been discussed were reviewed, comment invited with extensive dialogue from both industry and OCI. At the end of the last working public meeting held May 9, 2005, the Commissioner invited written comment on the entire proposed rule. The comment period was intended to provide industry with time to reflect on the proposed rule and offer specific thoughtful revisions or recommendations and then permit the Commissioner time to review the suggested revisions and recommendations prior to issuing the Notice of Hearing for the rule. The culmination of those meeting, including written comments received throughout the last year, is reflected in this proposed rule.
9. Any analysis and supporting documentation that OCI used in support of OCI's determination of the rule's effect on small businesses under s.
227.114:
This rule may have an effect on only one (1) regulated small business as defined in s.
227.114 (1), Wis. Stats., that is an LSHO and authorized to only write 10% of its premium as a preferred provider plan. OCI maintains a database of all licensed insurers in Wisconsin. Included with the information required to be submitted to OCI, the database includes information submitted by the companies related to premium revenue and employment. In an examination of this database, OCI identified only one insurer with annual premium volume of less than $5 million that would be affected by this proposed rule.
This one insurer would incur a one-time expense associated with filing new policy forms, modifying provider contracts and implementing remedial action plan procedures related to quality problems. It is possible that the one insurer might need to minimally modify its computer system to the extent necessary to incorporate emergency medical care rendered by nonparticipating providers. These one-time expenses are not considered to be of significant cost and therefore will not have a significant economic impact on the one insurer.
Further, the proposed rule has a delayed applicability date for new policies to January 1, 2007 and renewing policies to January 1, 2008. The significantly delayed applicability will allow the insurer to spread any cost that it may incur over time thus reducing any effect the rule might have on the one insurer. The delay will also give the insurer ample time to make necessary modifications to forms or contracts also minimizing any affect of the rule on the small business insurer.
10. If these changes may have a significant fiscal effect on the private sector, the anticipated costs that will be incurred by private sector in complying with the rule:
This rule is not expected to have a significant fiscal effect on the private sector regulated by OCI. The majority of insurers offering defined network plans, including health maintenance organizations and most preferred provider plans currently offer insurance coverage that complies with the minimum standards proposed in the amendments to ch.
Ins 9, Wis. Adm. Code. The proposed rule does not prohibit or require insurers offering preferred provider plans to redesign any existing plan. Insurers may continue selling and servicing policies that contain coinsurance, deductibles or other cost-sharing methods, however those plans may be required to include disclosure notices that will need to be filed with the Office prior to use. In addition insurers offering defined network, preferred provider plans will be required to submit to the OCI emergency medical care coverage language that is compliant with the regulation.
Insurers offering preferred provider plans will likely need to incur a one-time expense to modify existing contracts with participating providers through an addendum to comply with advance notice to enrollees regarding providers' plan status when elective procedures are scheduled. Additionally, the insurers may need to file updated forms and implement remedial action plans to address quality problems. It is possible that insurers might need to minimally modify existing computer systems for payment of emergency medical care services provided by nonparticipating providers.
Insurers may find a cost saving resulting from the rule through the receipt of fewer complaints from enrollees, employers and providers, and use fewer resources investigating and responding to complaints and grievances, and in preparing and documenting files for external review. Further, with significantly delayed applicability dates, insurers will have ample time to make necessary modifications including sufficient time to file any necessary form filings thereby reducing any possible effect of the proposed rule.
11. A description of the Effect on Small Business:
This rule may effect one small business regulated by the Office but should not have a significant economic impact . OCI identified one insurer that is an LSHO authorized to write no more than 10% of its premium from preferred provider business that had annual premium volume of less than $5 million, however the effect would not have a significant economic impact on that insurer for the reasons stated in above.
The insurer that may be affected by the proposed rule will incur a one-time expense related to the filing of compliant policy forms, modifying provider contracts and implementing a remedial action plan procedure related to quality problems. The proposed rule also includes a significantly delayed applicability date allowing the one insurer ample time for necessary modifications and to spread any associated costs over time thus limiting any effect the rule might have.
12. Agency contact person:
A copy of the full text of the proposed rule changes, analysis and fiscal estimate may be obtained from the WEB sites at:
http://oci.wi.gov/ocirules.htm or by contacting Inger Williams, OCI Services Section, at:
Phone: (608) 264-8110
Address: 125 South Webster St – 2nd Floor Madison WI 53702
Mail: PO Box 7873, Madison WI 53707-7873
13. Place where comments are to be submitted and deadline for submission:
The deadline for submitting comments is 4:00 p.m. on the 14th day after the date for the hearing stated in the Notice of Hearing.
Mailing address:
Julie E. Walsh
Legal Unit - OCI Rule Comment for Rule INS 9
Office of the Commissioner of Insurance
PO Box 7873
Madison WI 53707-7873
Street address:
Julie E. Walsh
Legal Unit - OCI Rule Comment for Rule INS 9
Office of the Commissioner of Insurance
125 South Webster St – 2nd Floor
Madison WI 53702
Initial Regulatory Flexibility Analysis
Notice is hereby further given that pursuant to s.
227.114, Stats., the proposed rule may have an affect on small businesses. The initial regulatory flexibility analysis is as follows:
a. Types of small businesses affected:
There is only one (1) regulated small business that may be affected by this rule that is a Limited Service Health Organization (LSHO) authorized to write no more than 10% of its premium from preferred provider plan business. The proposed rule would not have a significant economic impact on that one insurer as the one-time expense for filing updated forms, modifying provider contracts and implementing a procedure for remedial action plan related to quality problems are not considered significant. The one insurer might also need to minimally modify its computer system to incorporate coverage for emergency medical care from nonparticipating providers, but this would not considered to be a significant expense.
The affected insurer will have until January 1, 2007 for newly issued policies and until January 1, 2008 for renewing policies to comply with the proposed regulatory requirements. This delay will allow the insurer to spread any incurred cost over time thus reducing any potential financial effect of the rule and will permit more than sufficient time to modify forms and implement procedures necessary to comply with the proposed rule without being overly burdensome to the insurer.
b. Description of reporting and bookkeeping procedures required:
To the extent that the one LSHO small business provides a preferred provider plan, it will be required to comply with the preferred provider plan requirements and will incur a one-time expense associated with filing new policy forms, modifying provider contracts and implementing remedial action plan procedures related to quality problems. It is possible that the one insurer might also need to minimally modify its computer system for services rendered by nonparticipating providers for emergency medical care. The one insurer will have ample time within which to comply with the regulations due to significantly delayed applicability of the proposed rule.
c. Description of professional skills required:
The proposed rule does not impose additional professional skill requirements that it does not already possess.
OCI Small Business Regulatory Coordinator
The OCI small business coordinator is Eileen Mallow and may be reached at phone number (608) 266-7843 or at email address
Eileen.Mallow@oci.state.wi.us
Contact Person
A copy of the full text of the proposed rule changes, analysis and fiscal estimate may be obtained from the OCI internet WEB site at
http://oci.wi.gov/ocirules.htm or by contacting Inger Williams, Services Section, OCI, at:
Inger.Williams@OCI.State.WI.US, (608) 264-8110, 125 South Webster Street – 2
nd Floor, Madison WI or PO Box 7873, Madison WI 53707-7873.
Notice of Hearing
Marriage and Family Therapy, Professional Counseling and Social Work Examining Board
NOTICE IS HEREBY GIVEN that pursuant to authority vested in the Marriage and Family Therapy, Professional Counseling and Social Work Examining Board in ss.
15.08 (5) (b),
227.11 (2) and
457.14, Wis. Stats., and interpreting s.
457.10 (3),
457.11 and
457.14, Wis. Stats., the Marriage and Family Therapist Section will hold a public hearing at the time and place indicated below to consider an order to amend ss.
MPSW 16.03 and
17.01, relating to supervised clinical practice and temporary licenses issued by the Marriage and Family Therapist Section.
Hearing Date, Time and Location
Date: August 1, 2005
Time: 9:30 A.M.
Location: 1400 East Washington Avenue
Room 179A
Madison, Wisconsin
Appearances at the Hearing
Interested persons are invited to present information at the hearing. Persons appearing may make an oral presentation but are urged to submit facts, opinions and argument in writing as well. Facts, opinions and argument may also be submitted in writing without a personal appearance by mail addressed to the Department of Regulation and Licensing, Office of Legal Counsel, P.O. Box 8935, Madison, Wisconsin 53708, or by email to
pamela.haack@drl.state.wi.us. Written comments must be received on or before August 11, 2005 to be included in the record of rule-making proceedings.
Analysis prepared by the Department of Regulation and Licensing
