SB17,29,7 42. Prior to applying for an exemption, preliminary animal studies or
5preliminary clinical investigation establishes that the innovative medical
6technology or major enhancement to existing medical technology has a reasonable
7probability of advancing clinical diagnosis or therapy.
SB17,29,10 83. In the development and evaluation of the clinical applications, the applicant
9undertakes scientifically sound studies to determine clinical efficacy, safety,
10cost-effectiveness and appropriate utilization levels in a clinical setting.
SB17,29,14 114. The clinical trials, evaluation or research are conducted according to
12scientifically sound protocols subject to peer review and approval in accord with the
13requirements applicable to investigations and clinical evaluation involving human
14subjects.
SB17,29,16 155. The innovative medical technology is being installed to conduct necessary
16research, development and evaluation.
SB17,29,22 176. The applicant does not include any recovery of capital expenses incurred as
18part of an exemption under this subsection in its expense and revenue budget for
19purposes of rate setting until the applicant receives the approval of the federal food
20and drug administration and of the commission under this section for general
21medical use. The applicant may recover operating expenses only after all of the
22following occur:
SB17,29,23 23a. Approval by the federal food and drug administration for safety and efficacy.
SB17,29,2424 b. A 3rd party agrees to pay for these expenses.
SB17,30,3
1(c) The commission may not grant more than 2 exemptions for any particular
2type of innovative medical technology or for any particular major enhancement to
3existing medical technology.
SB17,30,9 4(4) Public hearing requirement. (a) Any person intending to undertake a
5project or activity subject to this section shall cause to be published a class 1 notice
6under ch. 985 in the official newspaper designated under s. 985.04 or 985.05 or, if
7none exists, in a newspaper likely to give notice in the area of the proposed project
8or activity. The notice shall describe the proposed project or activity and describe the
9time and place for the public hearing required under par. (b).
SB17,30,22 10(b) No sooner than 30 days after the date of publication of the notice under par.
11(a), the person shall conduct a public hearing on the proposed project or activity. The
12hearing shall be on the expected impact of the proposed project or activity on health
13care costs, the expected improvement, if any, in the local health care delivery system,
14and any other issue related to the proposed project or activity. Management staff,
15if any, of the person seeking to undertake the project or activity and, if possible, at
16least 3 members of the governing board of a not-for-profit health care provider, if
17any, seeking to undertake the project or activity shall attend the public hearing to
18review public testimony. The person seeking to undertake the project or activity
19shall record accurate minutes of the meeting, shall include copies of the minutes and
20any written testimony presented at the hearing in an application concerning the
21project or activity that is submitted under sub. (7) and shall submit the application
22within 10 days after the date of the public hearing.
SB17,31,2 23(5) Notification requirement. Any person intending to undertake a project
24subject to this section shall notify the commission in writing of this intent at least
2530 days prior to submitting an application for review. Any application expires unless

1the commission declares it complete within one year after the date the applicant
2notifies the commission of its intent to undertake the project.
SB17,31,7 3(6) Application fee. Each application for review of a project or activity subject
4to this section shall be accompanied by a fee that is established in rules promulgated
5by the commission. The commission shall promulgate rules that establish
6application fees that are sufficient to fund all of the commission's expenses under this
7section.
SB17,31,14 8(7) Review requirements. (a) The commission's review of an application
9begins on the date that it receives a completed application, including the fee under
10sub. (6). On or before the 20th day of the month following receipt of a completed
11application, the commission shall send a notice of receipt of a completed application
12to the applicant and shall publish a class 2 notice under ch. 985 containing this
13information in a daily newspaper with general circulation in the area where the
14proposed project would be located.
SB17,31,22 15(b) The commission may group applications for the same or similar types of
16facilities, services or applications that are proposed, for concurrent review. The
17commission shall base its review under this paragraph on a comparative analysis of
18these applications, using the criteria specified in sub. (8) and a ranking of its
19priorities. The applicant has the burden of proving, by a preponderance of the
20evidence, that each of the criteria specified in sub. (8) has been met or does not apply
21to the project. The commission shall, by rule, establish its review requirements
22under this paragraph.
SB17,32,3 23(8) Review criteria. The commission shall use the following criteria in
24reviewing each application under this section, plus any additional criteria that it
25develops by rule. The commission shall consider cost containment as its first priority

1in applying these criteria, and shall consider the recommendations and comments
2of affected parties. The commission may not approve any project under this section
3unless the applicant demonstrates all of the following:
SB17,32,4 4(a) The project is consistent with the state health services plan under sub. (16).
SB17,32,5 5(b) A need for the project, as determined by current and projected utilization.
SB17,32,8 6(c) The project would efficiently and economically use resources, including
7financing for capital investment and operating expenses, when measured against
8alternative uses of resources.
SB17,32,9 9(d) Sufficient cash reserves and cash flow to pay operating and capital costs.
SB17,32,13 10(e) Increases in operating and capital costs resulting from the project are
11reasonable, including the direct charge to the consumer and the charges to be paid
12by medical assistance and by disability insurers. The commission shall determine
13the effect on these rates of the applicant's project for review under this paragraph.
SB17,32,1414 (f) Financing is available at market rates.
SB17,32,15 15(g) Health care personnel are available and would be effectively used.
SB17,32,16 16(h) Proposed construction costs are consistent with industry averages.
SB17,32,18 17(j) Any proposed addition of area and construction or renovation alternatives
18are cost-effective.
SB17,32,19 19(k) The project is consistent with efficiency standards and criteria.
SB17,32,25 20(L) The applicant is participating in a utilization review program that is
21applicable to a statistical sampling of all hospital patients regardless of payment
22source, that requires public disclosure of all review data in a form useful to the
23commission but protects the identities of individual patients and health care
24professionals and that is conducted by persons who are free from any substantial
25conflict of interest.
SB17,33,2
1(m) The applicant has prepared a plan acceptable to the commission for the
2provision of health care to indigents.
SB17,33,7 3(9) Review process. (a) The commission shall hold a public meeting upon the
4request of an affected party to review projects seeking approval, at which all affected
5parties may present testimony. The commission may consider projects seeking
6approval that are within a related area at joint public meetings. The commission
7shall keep minutes or other record of testimony presented at the public meeting.
SB17,33,18 8(b) The commission shall issue an initial finding to approve or reject the project
9within 75 days after the date that it publishes its notice under sub. (7) (a), unless all
10applicants consent to an extension of this period. The commission may not require
11substantial modification of any project as a condition of approval without the
12applicant's consent. The commission may extend by 60 days the review cycle of all
13projects being reviewed concurrently under sub. (7) (b), if it finds that completing the
14reviews within 75 days after the date it publishes its notice under sub. (7) (a) is not
15practicable due to the volume of applications received. The commission shall submit
16its decision to the applicant. Unless the applicant makes a timely request for a
17hearing under par. (c), the commission's initial finding under this paragraph is its
18final action.
SB17,33,24 19(c) 1. Any applicant whose project is rejected may request a public hearing to
20review the commission's initial finding under par. (b), if the request is submitted in
21writing within 10 days after the commission's decision, or may initiate a hearing
22under s. 227.42. The commission shall commence the hearing under par. (b) within
2330 days after receiving a timely request, unless all parties consent to an extension
24of this period.
SB17,34,3
12. Except as provided in s. 227.42, ss. 227.43 to 227.50 do not apply to hearings
2under this paragraph. The commission shall promulgate rules to establish all of the
3following:
SB17,34,4 4a. Procedures for scheduling hearings under this paragraph.
SB17,34,7 5b. Procedures for conducting hearings under this paragraph, including
6methods of presenting arguments, cross-examination of witnesses and submission
7of exhibits.
SB17,34,9 8c. Procedures following the completion of a hearing under this paragraph,
9including the establishment of time limits for issuance of a decision.
SB17,34,11 10d. Standards relating to ex parte communication in hearings under this
11paragraph.
SB17,34,1212 e. Procedures for reconsideration and rehearing.
SB17,34,1313 3. The commission shall issue all decisions in writing.
SB17,34,1714 4. Each applicant at any hearing under this paragraph has the burden of
15proving, by clear and convincing evidence, that the commission's initial finding was
16contrary to the weight of the evidence on the record when considered as a whole,
17arbitrary and capricious or contrary to law.
SB17,34,21 18(10) Judicial review. Any applicant adversely affected by a decision of the
19commission under sub. (9) (c) may petition for judicial review of the decision under
20s. 227.52. The scope of judicial review shall be as provided in s. 227.57 and the record
21before the reviewing court shall consist of all of the following:
SB17,34,23 22(a) The application and all supporting material received prior to the
23commission's initial finding under sub. (9) (b).
SB17,34,2424 (b) The record of the public meeting under sub. (9) (a).
SB17,35,2
1(c) The commission's analysis of the project and its compliance with the criteria
2specified in sub. (8).
SB17,35,33 (d) The record of the hearing held under sub. (9) (c).
SB17,35,4 4(e) The commission's decision and analysis issued under sub. (9) (b) or (c) 3.
SB17,35,7 5(11) Validity and contents of an approval. (a) An approval is valid for one
6year from the date of issuance. The commission may grant a single extension of up
7to 6 months.
SB17,35,9 8(b) The commission shall specify the maximum expenditure that may be
9obligated for a project.
SB17,35,14 10(c) Each approval shall include the proposed timetable for implementing and
11completing the project and, for the 3-year period following completion of the project,
12the project's depreciation and interest schedule, staff required for the project, the
13proposed per diem rate needed to pay capital costs and the proposed per diem rate
14needed to pay operating costs.
SB17,35,20 15(12) Rate approval. Rate reimbursement to cover the cost of the project
16established for medical assistance under s. 49.45 (3) (e) may not exceed the rates
17proposed in the approval under sub. (11) (c) by more than 5% during the 3-year
18period following completion of the project. This subsection does not apply if the
19hospital demonstrates to the satisfaction of the commission that the excess was due
20to conditions beyond its control.
SB17,36,2 21(13) Capital budget reporting. Each hospital shall annually, by January 1,
22beginning January 1, 1998, report to the commission a proposed capital budget for
23the 5-year period that begins with July 1, 1998. This budget shall specify all
24anticipated capital expenditures subject to this section and anticipated application
25dates, if any. This requirement does not apply to the purchase or other acquisitions

1of a hospital under sub. (1) (d). An application under sub. (5) from a hospital to
2approve a project is not complete until the commission receives this information.
SB17,36,3 3(14) Rule making. The commission shall promulgate all of the following rules:
SB17,36,44 (a) Establishing review requirements under sub. (7) (b).
SB17,36,5 5(b) Establishing procedures and standards under sub. (9) (c) 2.
SB17,36,7 6(c) Establishing a method for defining an acute care service area under sub. (16)
7(b).
SB17,36,8 8(d) Establishing appropriate fees for applications, as specified in sub. (6).
SB17,36,11 9(15) Enforcement. (a) No person may recover through charges or rates any
10depreciation, interest or principal payments or any operating expenses associated
11with a project subject to this section that does not have the commission's approval.
SB17,36,14 12(b) 1. If a project whose cost falls below the minimum threshold specified in sub.
13(1) (a), (b) or (c) incurs costs exceeding the threshold, the person who operates the
14project shall submit an application for the commission's approval under sub. (1).
SB17,36,17 152. If a project that has received the commission's approval incurs a cost overrun,
16the person who operates the project shall submit another application for the
17commission's approval under sub. (1).
SB17,36,18 18(c) No person may subdivide a project to avoid the requirements of this section.
SB17,36,25 19(d) The commission's approval of any project is revoked if the capital
20expenditures specified in the approval have not been obligated, if financing in an
21amount sufficient to complete the project has not been obtained or if substantial and
22continuing progress has not been undertaken within the period specified in the
23approval. In addition, the commission's approval of any project is revoked if the
24person who operates a project misses any other deadlines specified in the approval
25and fails to make a good faith effort to meet these deadlines.
SB17,37,4
1(e) The commission may reject the application for approval of a project operated
2by any person who has repeatedly been subject to the penalties specified in this
3subsection or may impose restrictions as part of its approval to ensure compliance
4with this section.
SB17,37,10 5(16) State health services plan. (a) The commission shall adopt a state health
6services plan using information provided by the office of health care information in
7the office of the commissioner of insurance, at least once every 3 years that includes
8a description of the hospital system in the state and identifies health care needs and
9surpluses with respect to existing health care services, facilities and equipment and
10other components the commission finds useful.
SB17,37,15 11(b) The commission may not accept any application for a project under this
12section for the addition of hospital beds that would exceed the number of beds
13described by the state health services plan for the acute care service area where the
14project would be located. The commission shall establish its method for defining an
15acute care service area by rule.
SB17, s. 14 16Section 14. 632.75 (5) of the statutes is amended to read:
SB17,37,2017 632.75 (5) Payments for hospital services. No insurer may reimburse a
18hospital for patient health care costs at a rate exceeding the rate established under
19ch. 54, 1985 stats., or s. 146.60, 1983 stats., for care provided prior to July 1, 1987

20subch. II of ch. 196.
SB17, s. 15 21Section 15 . Nonstatutory provisions.
SB17,37,2222 (1)  Public service commission; hospital rate setting.
SB17,38,223 (a) By October 1, 1997, the public service commission shall submit, under
24section 16.515 of the statutes, a request to supplement the appropriation under
25section 20.155 (3) (gm) of the statutes, as created by this act, that details a proposed

1budget for activities of the public service commission under subchapter II of chapter
2196 of the statutes, as created by this act.
SB17,38,63 (b)  1. The public service commission shall submit proposed rules required
4under section 196.993 of the statutes, as created by this act, to the legislative council
5staff for review under section 227.15 (1) of the statutes no later than January 1, 1998.
6These rules may not take effect before July 1, 1998.
SB17,38,14 72. Using the procedure under section 227.24 of the statutes, the public service
8commission shall promulgate rules required under section 196.993 (2) of the
9statutes, as created by this act, for the period prior to the effective date of the rules
10submitted under subdivision 1., but not to exceed the period authorized under
11section 227.24 (1) (c) and (2) of the statutes. Notwithstanding section 227.24 (1) (a)
12and (2) (b) of the statutes, the public service commission need not provide evidence
13of the necessity of preservation of the public peace, health, safety or welfare in
14promulgating the rules under this paragraph.
SB17,38,1615 (c) By January 1, 1998, the public service commission shall do all of the
16following:
SB17,38,19 171. Estimate the total amount of revenue required for fiscal year 1997-98 for
18administration by the commission of subchapter II of chapter 196 of the statutes, as
19created by this act.
SB17,39,2 202. Assess the estimated total amount under subdivision 1 . to hospitals, as
21defined in section 150.01 (12) of the statutes, under the rates established by rule
22under paragraph (b) 2. and in proportion to each hospital's respective net income, as
23defined in section 196.9996 (1) (e) of the statutes, as created by this act, during the
24hospital's most recently concluded entire fiscal year, except that the public service

1commission may not assess a hospital that has a net income of 3% or less over the
2net income for the hospital's next most recently concluded entire fiscal year.
SB17,39,4 33. Credit all payments of assessments to the appropriation under section
420.155 (3) (gm) of the statutes, as created by this act.
SB17,39,65 (d) Every hospital that is assessed under paragraph (c ) 2. shall, by April 1,
61998, pay the entire amount assessed the hospital.
SB17, s. 16 7Section 16. Initial applicability.
SB17,39,108 (1) Public service commission; hospital rate setting. This act first applies to
9requests for rate changes submitted under subchapter II of chapter 196 of the
10statutes, as created by this act, on July 1, 1998.
SB17, s. 17 11Section 17. Effective dates. This act takes effect on September 1, 1997, or
12on the day after publication, whichever is later, except as follows:
SB17,39,1413 (1) Hospital rate setting. The repeal of section 20.155 (3) (a) of the statutes
14takes effect on January 1, 1999.
SB17,39,1515 (End)
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