9. Analysis and supporting documentation that OCI used in support of OCI’s determination of the rule’s effect on small business or in preparation of an economic impact analysis:
This proposed rule may affect small business to the extent the provider that qualifies as a small business is currently insured under a policy with cost sharing provisions that exceed 25% of the liability limit. Based upon a 2012 survey, the vast majority of providers nearly 14,000 of 15,000 providers were covered under policies that comply with the proposed rule. Providers will be required to obtain compliant policies most likely at a higher premium that is currently paid. There is a chance that this increase in premium for a relatively small number of providers may be shifted to persons obtaining care from providers affected by this proposed rule change.
10. Effect on small business.
This proposed rule may affect small business to the extent the provider that qualifies as a small business is currently insured under a policy with cost sharing provisions that exceed 25% of the liability limit. Based upon a 2012 survey, the vast majority of providers nearly 14,000 of 15,000 providers were covered under policies that comply with the proposed rule. Providers will be required to obtain compliant policies on or after July 1, 2017 and will most likely be charged a higher premium than is currently paid. The potential increase in premium will not have a significant effect on small businesses that participate in the fund nor should it negatively affect the small business’s ability to compete with other providers.
11. A copy of any comments and opinion prepared by the Board of Veterans Affairs under s. 45.03 (2m), Stats., for rules proposed by the Department of Veterans Affairs. None.
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 site at: http://oci.wi.gov/ocirules.htm or by contacting Julie E. Walsh:
Phone: (608) 264-8101
Address: 125 South Webster St – 2nd Floor, Madison WI 53703-3474
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 March 22, 2016.
Mailing address:
Julie E. Walsh
Legal Unit - OCI Rule Comment for Rule Ins 1735
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 1735
Office of the Commissioner of Insurance
125 South Webster St – 2nd Floor
Madison WI 53703-3474
Email address:
Julie E. Walsh
The proposed rule changes are:
SECTION 1. Ins 17.35 (4) is repealed and recreated to read:
Ins 17.35 (4) Deductibles. (a) In addition to sub. (2) (d), that requires the insurer or foreign insurer to be responsible for payment of the total amount of indemnity up to the limits under s. 655.23 (4), Stats., a policy as defined at s. 600.03 (35), Stats., or group policy as defined at s. 600.03 (23), Stats., that contains any term or condition that results in or requires the provider to reimburse, pay or otherwise be financially responsible to the insurer or foreign insurer for a portion of the limits set forth in s. 655.23 (4), Stat., such provision or provisions in aggregate shall not exceed 25% of the total amount of indemnity up to the limits under s. 655.23 (4), Stats. The insurer or foreign insurer shall file with the office the entire policy, in accordance with s. 631.13 (intro.), Stats., and shall include all provisions including but not limited to, deductible, coinsurance, other cost sharing provisions, endorsements, amendments, agreements or other instruments, that has the effect of requiring the provider to reimburse, pay or otherwise be financially responsible to the insurer or foreign insurer in accordance with s. 631.20, Stats. (b) After the insurer’s or foreign insurer’s payment obligation is satisfied, the insurer or foreign insurer may recoup the amount of cost sharing from the insured provider in an amount that does not exceed 25% of the total amount of indemnity up to the limits under s. 655.23 (4), Stats. SECTION 2. These changes first apply to health care liability coverage policies issued on or after July 1, 2017.
SECTION 3. These changes will take effect the first day of the month after publication, as provided in s. 227.22(2) (intro.), Stats.
Office of the Commissioner of Insurance
Private Sector Fiscal Analysis
Section Ins 17.35 relating to deductibles and cost sharing provision limitations in medical malpractice insurance policies and affecting small business in primary coverage for the Injured Patients and Families Compensation Fund and affecting small business. This rule change will have no significant effect on the private sector as this proposed rule limits the amount of financial responsibility a health care provider may bear under fully-insured medical malpractice liability coverage to no more than 25%. The rule directly affects only a small portion of the fund participants who currently carry coverage with cost sharing provisions that in total exceed the 25% threshold proposed in this rule. There should not be an effect on county, city, village, town, school district, technical college district and sewerage district fiscal liabilities and revenues.
