SB269: Bill Text

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1999 - 2000 LEGISLATURE

1999 Senate BILL 269

October 28, 1999 - Introduced by Senators Breske, Clausing, Drzewiecki, Roessler, Schultz and Rosenzweig, cosponsored by Representatives Underheim, F. Lasee, Musser, Albers, Ladwig and Urban. Referred to Committee on Health, Utilities, Veterans and Military Affairs.

SB269,1,8 An Act to repeal 609.15 (title) and (1) (intro.); to renumber 609.15 (1) (c), 609.15 (2) (c), 609.15 (2) (d) and 609.15 (2) (e); to renumber and amend 609.15 (1) (a), 609.15 (1) (b), 609.15 (2) (intro.), 609.15 (2) (a) and 609.15 (2) (b); to amend 40.51 (8), 40.51 (8m), 600.01 (2) (b), 601.42 (4) and 609.655 (4) (b); and to create 111.91 (2) (r), 601.31 (1) (Lp), 601.31 (1) (Lr), 632.83 and 632.835 of the statutes; relating to: requiring insurers to establish internal grievance procedures, independent review of certain coverage determinations made by health benefit plans and granting rule-making authority.

Analysis by the Legislative Reference Bureau

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 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 $500, 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 $50 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 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.

For further information see the state and local 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:

SB269, s. 1 Section 1. 40.51 (8) of the statutes is amended to read:

SB269,3,5 40.51 (8) Every health care coverage plan offered by the state under sub. (6) shall comply with ss. 631.89, 631.90, 631.93 (2), 632.72 (2), 632.746 (1) to (8) and (10), 632.747, 632.748, 632.83, 632.835, 632.85, 632.853, 632.855, 632.87 (3) to (5), 632.895 (5m) and (8) to (13) and 632.896.

SB269, s. 2 Section 2. 40.51 (8m) of the statutes is amended to read:

SB269,4,4 40.51 (8m) Every health care coverage plan offered by the group insurance board under sub. (7) shall comply with ss. 632.746 (1) to (8) and (10), 632.747, 632.748, 632.83, 632.835, 632.85, 632.853, 632.855 and 632.895 (11) to (13).

SB269, s. 3 Section 3. 111.91 (2) (r) of the statutes is created to read:

SB269,4,8 111.91 (2) (r) The requirements related to internal grievance procedures under s. 632.83 and independent review of certain health benefit plan determinations under s. 632.835.

SB269, s. 4 Section 4. 600.01 (2) (b) of the statutes is amended to read:

SB269,4,11 600.01 (2) (b) Group or blanket insurance described in sub. (1) (b) 3. and 4. is not exempt from ss. 632.745 to 632.749, 632.83 or 632.835 or ch. 633 or 635.

SB269, s. 5 Section 5. 601.31 (1) (Lp) of the statutes is created to read:

SB269,4,14 601.31 (1) (Lp) For certifying as an independent review organization under s. 632.835, $400.

SB269, s. 6 Section 6. 601.31 (1) (Lr) of the statutes is created to read:

SB269,4,17 601.31 (1) (Lr) For each biennial recertification as an independent review organization under s. 632.835, $100.

SB269, s. 7 Section 7. 601.42 (4) of the statutes is amended to read:

SB269,5,5 601.42 (4) Replies. Any officer, manager or general agent of any insurer authorized to do or doing an insurance business in this state, any person controlling or having a contract under which the person has a right to control such an insurer, whether exclusively or otherwise, any person with executive authority over or in charge of any segment of such an insurer's affairs, any individual practice association or officer, director or manager of an individual practice association, any insurance agent or other person licensed under chs. 600 to 646, any provider of services under a continuing care contract, as defined in s. 647.01 (2), any independent review organization certified or recertified under s. 632.835 (4) or any health care provider, as defined in s. 655.001 (8), shall reply promptly in writing or in other designated form, to any written inquiry from the commissioner requesting a reply.

SB269, s. 8 Section 8. 609.15 (title) and (1) (intro.) of the statutes are repealed.

SB269, s. 9 Section 9. 609.15 (1) (a) of the statutes is renumbered 632.83 (2) (a) and amended to read:

SB269,5,12 632.83 (2) (a) Establish and use an internal grievance procedure that is approved by the commissioner and that complies with sub. (2) (3) for the resolution of enrollees' insureds' grievances with the limited service health organization, preferred provider plan or managed care health benefit plan.

SB269, s. 10 Section 10. 609.15 (1) (b) of the statutes is renumbered 632.83 (2) (b) and amended to read:

SB269,5,16 632.83 (2) (b) Provide enrollees insureds with complete and understandable information describing the internal grievance procedure under par. (a).

SB269, s. 11 Section 11. 609.15 (1) (c) of the statutes is renumbered 632.83 (2) (c).

SB269, s. 12 Section 12. 609.15 (2) (intro.) of the statutes is renumbered 632.83 (3) (intro.) and amended to read:

SB269,5,21 632.83 (3) (intro.) The internal grievance procedure established under sub. (1) (2) (a) shall include all of the following elements:

SB269, s. 13 Section 13. 609.15 (2) (a) of the statutes is renumbered 632.83 (3) (a) and amended to read:

SB269,5,25 632.83 (3) (a) The opportunity for an enrollee insured to submit a written grievance in any form.

SB269, s. 14 Section 14. 609.15 (2) (b) of the statutes is renumbered 632.83 (3) (b) and amended to read:

SB269,6,6 632.83 (3) (b) Establishment of a grievance panel for the investigation of each grievance submitted under par. (a), consisting of at least one individual authorized to take corrective action on the grievance and at least one enrollee insured other than the grievant, if an enrollee insured is available to serve on the grievance panel.

SB269, s. 15 Section 15. 609.15 (2) (c) of the statutes is renumbered 632.83 (3) (c).

SB269, s. 16 Section 16. 609.15 (2) (d) of the statutes is renumbered 632.83 (3) (d).

SB269, s. 17 Section 17. 609.15 (2) (e) of the statutes is renumbered 632.83 (3) (e).

SB269, s. 18 Section 18. 609.655 (4) (b) of the statutes is amended to read:

SB269,6,18 609.655 (4) (b) Upon completion of the review under par. (a), the medical director of the managed care plan shall determine whether the policy or certificate will provide coverage of any further treatment for the dependent student's nervous or mental disorder or alcoholism or other drug abuse problems that is provided by a provider located in reasonably close proximity to the school in which the student is enrolled. If the dependent student disputes the medical director's determination, the dependent student may submit a written grievance under the managed care plan's internal grievance procedure established under s. 609.15 632.83.

SB269, s. 19 Section 19. 632.83 of the statutes is created to read:

SB269,6,24 632.83 Internal grievance procedure. (1) In this section, "health benefit plan" has the meaning given in s. 632.745 (11), except that "health benefit plan" includes the coverage specified in s. 632.745 (11) (b) 10. and includes a policy, certificate or contract under s. 632.745 (11) (b) 9. that provides only limited-scope dental or vision benefits.

SB269,6,25 (2) Every insurer that issues a health benefit plan shall do all of the following:

SB269, s. 20 Section 20. 632.835 of the statutes is created to read:

SB269,7,3 632.835 Independent review of adverse and experimental treatment determinations. (1) Definitions. In this section:

SB269,7,5 (a) "Adverse determination" means a determination by or on behalf of an insurer that issues a health benefit plan to which all of the following apply:

SB269,7,7 1. An admission to a health care facility, the availability of care, the continued stay or other treatment that is a covered benefit has been reviewed.

SB269,7,10 2. Based on the information provided, the treatment under subd. 1. does not meet the health benefit plan's requirements for medical necessity, appropriateness, health care setting, level of care or effectiveness.

SB269,7,13 3. Based on the information provided, the insurer that issued the health benefit plan reduced, denied or terminated the treatment under subd. 1. or payment for the treatment under subd. 1.

SB269,7,16 4. Subject to sub. (5) (c), the amount of the reduction or the cost or expected cost of the denied or terminated treatment or payment exceeds, or will exceed during the course of the treatment, $500.

SB269,7,19 (b) "Experimental treatment determination" means a determination by or on behalf of an insurer that issues a health benefit plan to which all of the following apply:

SB269,7,20 1. A proposed treatment has been reviewed.

SB269,7,22 2. Based on the information provided, the treatment under subd. 1. is determined to be experimental under the terms of the health benefit plan.

SB269,7,25 3. Based on the information provided, the insurer that issued the health benefit plan denied the treatment under subd. 1. or payment for the treatment under subd. 1.

SB269,8,2 4. Subject to sub. (5) (c), the cost or expected cost of the denied treatment or payment exceeds, or will exceed during the course of the treatment, $500.

SB269,8,4 (c) "Health benefit plan" has the meaning given in s. 632.745 (11), except that "health benefit plan" includes the coverage specified in s. 632.745 (11) (b) 10.

SB269,8,6 (d) "Treatment" means a medical service, diagnosis, procedure, therapy, drug or device.

SB269,8,11 (2) Review requirements; who may conduct. (a) Every insurer that issues a health benefit plan shall establish an independent review procedure whereby an insured under the health benefit plan, or his or her authorized representative, may request and obtain an independent review of an adverse determination or an experimental treatment determination made with respect to the insured.

SB269,8,19 (b) Whenever an adverse determination or an experimental treatment determination is made, the insurer involved in the determination shall provide notice to the insured of the insured's right to obtain the independent review required under this section, how to request the review and the time within which the review must be requested. The notice shall include a current listing of independent review organizations certified under sub. (4). An independent review under this section may be conducted only by an independent review organization certified under sub. (4) and selected by the insured.

SB269,8,25 (c) Except as provided in par. (d), an insured must exhaust the internal grievance procedure under s. 632.83 before the insured may request an independent review under this section. Except as provided in sub. (9), an insured who uses the internal grievance procedure must request an independent review as provided in sub. (3) (a) within 4 months after the insured receives notice of the disposition of his or her grievance under s. 632.83 (3) (d).

SB269,9,3 (d) An insured is not required to exhaust the internal grievance procedure under s. 632.83 before requesting an independent review if any of the following apply:

SB269,9,5 1. The insured and the insurer agree that the matter may proceed directly to independent review under sub. (3).

SB269,9,12 2. Along with the notice to the insurer of the request for independent review under sub. (3) (a), the insured submits to the independent review organization selected by the insured a request to bypass the internal grievance procedure under s. 632.83 and the independent review organization determines that the health condition of the insured is such that requiring the insured to use the internal grievance procedure before proceeding to independent review would jeopardize the life or health of the insured or the insured's ability to regain maximum function.

SB269,9,24 (3) Procedure. (a) To request an independent review, an insured or his or her authorized representative shall provide timely written notice of the request for independent review, and of the independent review organization selected, to the insurer that made or on whose behalf was made the adverse or experimental treatment determination. The insurer shall immediately notify the commissioner and the independent review organization selected by the insured of the request for independent review. The insured or his or her authorized representative must pay a $50 fee to the independent review organization. If the insured prevails on the review, in whole or in part, the entire amount paid by the insured or his or her authorized representative shall be refunded by the insurer to the insured or his or her authorized representative. For each independent review in which it is involved, an insurer shall pay a fee to the independent review organization.

SB269,10,3 (b) Within 3 business days after receiving written notice of a request for independent review under par. (a), the insurer shall submit to the independent review organization copies of all of the following:

SB269,10,5 1. Any information submitted to the insurer by the insured in support of the insured's position in the internal grievance under s. 632.83.

SB269,10,7 2. The contract provisions or evidence of coverage of the insured's health benefit plan.

SB269,10,9 3. Any other relevant documents or information used by the insurer in the internal grievance determination under s. 632.83.

SB269,10,15 (c) Within 5 business days after receiving the information under par. (b), the independent review organization shall request any additional information that it requires for the review from the insured or the insurer. Within 5 business days after receiving a request for additional information, the insured or the insurer shall submit the information or an explanation of why the information is not being submitted.

SB269,10,18 (d) An independent review under this section may not include appearances by the insured or his or her authorized representative, any person representing the health benefit plan or any witness on behalf of either the insured or the insurer.

SB269,11,3 (e) In addition to the information under pars. (b) and (c), the independent review organization may accept for consideration any typed or printed, verifiable medical or scientific evidence that the independent review organization determines is relevant, regardless of whether the evidence has been submitted for consideration at any time previously. The insurer and the insured shall submit to the other party to the independent review any information submitted to the independent review organization under this paragraph and pars. (b) and (c). If, on the basis of any additional information, the insurer reconsiders the insured's grievance and determines that the treatment that was the subject of the grievance should be covered, the independent review is terminated.

SB269,11,11 (f) If the independent review is not terminated under par. (e), the independent review organization shall, within 30 business days after the expiration of all time limits that apply in the matter, make a decision on the basis of the documents and information submitted under this subsection. The decision shall be in writing, signed on behalf of the independent review organization and served by personal delivery or by mailing a copy to the insured or his or her authorized representative and to the insurer. A decision of an independent review organization is binding on the insured and the insurer.