AB876: Bill Text

This bill provides that an insurer is not required to provide the notice about the independent review procedure to an insured who uses the insurer's internal grievance procedure until the insurer sends notice of the disposition of the internal grievance if the health benefit plan issued by the insurer contains a description of the procedure, including a description of the insured's right to obtain an independent review, how to request the review, the time within which the review must be requested, and how to obtain a current listing of certified independent review organizations. In addition, the insurer must provide on its explanation of benefits form a reference to the section of the policy or certificate that contains the description. (An insurer sends its explanation of benefits form to an insured after the insured has received health care services to provide information about the extent to which the insurance covered the services.)

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:

AB876, s. 1 Section 1. 15.735 of the statutes is created to read:

AB876,6,4 15.735 Same; attached boards. (1) Small employer catastrophic reinsurance board. (a) There is created a small employer catastrophic reinsurance board that is attached to the office of the commissioner of insurance under s. 15.03. The board shall consist of the commissioner of insurance and the following members:

AB876,6,7 1. Two members who represent small employers, as defined in s. 635.02 (7), and who are selected from a list of nominees submitted by the National Federation of Independent Business and Wisconsin Independent Businesses, Inc.

AB876,6,11 2. Four members who represent small employer insurers, as defined in s. 635.02 (8), 2 of whom are selected from a list of nominees submitted by the Wisconsin Association of Life and Health Insurers, Inc., and 2 of whom are selected from a list of nominees submitted by the Wisconsin Association of Health Plans.

AB876,6,13 3. One member who is a physician, as defined in s. 448.01 (5), and who is selected from a list of nominees submitted by the State Medical Society of Wisconsin.

AB876,6,15 4. One member who represents hospitals and who is selected from a list of nominees submitted by the Wisconsin Health and Hospital Association.

AB876,6,17 (b) The members under par. (a) 1. to 4. shall be appointed for 3-year terms. Any such member may be removed by the governor for just cause.

AB876,6,21 (2) Small employer catastrophic care board. (a) There is created a small employer catastrophic care board that is attached to the office of the commissioner of insurance under s. 15.03. The board shall consist of the commissioner of insurance and the following members:

AB876,6,22 1. Four members who are small employers, as defined in s. 635.02 (7).

AB876,6,23 2. Four members who are small employer insurers, as defined in s. 635.02 (8).

AB876,6,25 3. Two members who represent the medical professions, at least one of whom is a physician, as defined in s. 448.01 (5).

AB876,7,2 (b) The members under par. (a) 1. to 3. shall be appointed for 3-year terms. Any such member may be removed by the governor for just cause.

AB876, s. 2 Section 2. 16.735 of the statutes is created to read:

AB876,7,5 16.735 Negotiations for purchase of prescription drugs; rebates. (1) In this section:

AB876,7,6 (a) "Health care provider" has the meaning given in s. 146.81 (1).

AB876,7,7 (b) "Insurer" has the meaning given in s. 632.745 (15).

AB876,7,11 (c) "Labeler" means a person that receives prescription drugs from a manufacturer or wholesaler, repackages the prescription drugs for later retail sale, and has a labeler code issued by the federal food and drug administration under 21 CFR 207.20 (b).

AB876,7,13 (d) "Manufacturer" means a manufacturer of prescription drugs and includes a subsidiary or affiliate of the manufacturer.

AB876,7,14 (e) "Pharmacist" has the meaning given in s. 450.01 (15).

AB876,7,15 (f) "Prescription drug" has the meaning given in s. 450.01 (20).

AB876,7,18 (g) "Self-insurer" means an employer or labor organization acting solely or acting jointly with a labor organization or an employer to provide employee health care benefits on a self-insured basis.

AB876,7,20 (2) The department or an entity with which the department contracts may do all of the following:

AB876,7,25 (a) Assist a health care provider, insurer, or self-insurer that acts in this state or that seeks to act in conjunction with associations of health care providers, insurers, or self-insurers in states other than this state to negotiate rebate agreements with manufacturers or labelers for prescription drugs that are produced by the manufacturers or repackaged by the labelers and are sold for prescribed use.

AB876,8,6 (b) Assist a health care provider, insurer, or self-insurer to develop an in-state purchasing group or, in conjunction with associations of health care providers, insurers, or self-insurers in states other than this state, a multistate purchasing group, for the direct negotiation with prescription drug manufacturers and labelers of reduced charges for prescription drugs that are produced by the manufacturers or repackaged by the labelers and are sold for prescribed use.

AB876, s. 3 Section 3. 20.145 (1) (g) of the statutes, as affected by 2001 Wisconsin Act 16, is amended to read:

AB876,8,15 20.145 (1) (g) General program operations. The amounts in the schedule for general program operations and to transfer to the small employer catastrophic care program fund $500,000 annually, by no later than January 30, beginning in 2003 and ending in 2007. Ninety percent of all moneys received under ss. 601.31, 601.32, 601.42 (7), 601.45, and 601.47 and by the commissioner for expenses related to insurance company restructurings, except for restructurings specified in par. (h), shall be credited to this appropriation account.

AB876, s. 4 Section 4. 20.145 (1) (j) of the statutes is created to read:

AB876,8,19 20.145 (1) (j) Small employer insurer catastrophic reimbursements. All moneys received under s. 635.25 (3) (b), to reimburse small employer insurers as provided in s. 635.25 (2) (c).

AB876, s. 5 Section 5. 20.145 (1) (q) of the statutes is created to read:

AB876,8,23 20.145 (1) (q) Small employer catastrophic care program reimbursements. From the small employer catastrophic care program fund, a sum sufficient for reimbursing claims costs under s. 635.30 (6) (c).

AB876, s. 6 Section 6. 20.515 (2) (g) of the statutes is amended to read:

AB876,9,6 20.515 (2) (g) Private employer health care coverage plan. All moneys received under subch. X of ch. 40 from employers who elect to participate in the private employer health care coverage program under subch. X of ch. 40 and from any other person under s. 40.98 (2) (h), for the costs of designing, marketing , and contracting for or providing administrative services for the program and for lapsing to the general fund the amounts required under s. 40.98 (6m).

AB876, s. 7 Section 7. 25.17 (1) (pd) of the statutes is created to read:

AB876,9,8 25.17 (1) (pd) Small employer catastrophic care program fund (s. 25.57);

AB876, s. 8 Section 8. 25.57 of the statutes is created to read:

AB876,9,12 25.57 Small employer catastrophic care program fund. There is established a separate nonlapsible trust fund designated as the small employer catastrophic care program fund, to consist of:

AB876,9,13 (1) The moneys transferred under s. 20.145 (1) (g).

AB876,9,14 (2) Insurer assessments established under s. 635.30 (3) (a) 2.

AB876,9,15 (3) Provider assessments established under s. 635.30 (3) (a) 3.

AB876,9,16 (4) Premiums established under s. 635.30 (3) (a) 4.

AB876, s. 9 Section 9. 40.51 (6) of the statutes is renumbered 40.51 (6) (a) and amended to read:

AB876,9,24 40.51 (6) (a) This Except as provided in par. (b), the state shall offer to all of its employees at least 2 insured or uninsured health care coverage plans providing substantially equivalent hospital and medical benefits, including a health maintenance organization or a preferred provider plan, if those health care plans are determined by the group insurance board to be available in the area of the place of employment and are approved by the group insurance board.

AB876, s. 10 Section 10. 40.51 (6) (b) of the statutes is created to read:

AB876,10,7 40.51 (6) (b) Notwithstanding s. 40.03 (6) (c), in addition to the health care coverage plans offered under par. (a), the state shall also offer to all of its employees a defined contribution plan that permits employees to choose the level of premiums, deductibles, and co-payments and to select the hospital and medical benefits offered under the plan, but only if the group insurance board determines that such a defined contribution plan is available in the area of the place of employment and approves the plan.

AB876, s. 11 Section 11. 40.98 (2) (h) of the statutes is created to read:

AB876,10,14 40.98 (2) (h) The department may seek funding from any person for the payment of costs of designing, marketing, and contracting for or providing administrative services under the health care coverage program and for lapsing to the general fund any amount required under sub. (6m). Any moneys received by the department under this paragraph shall be credited to the appropriation account under s. 20.515 (2) (g).

AB876, s. 12 Section 12. 40.98 (6m) of the statutes is created to read:

AB876,10,24 40.98 (6m) The secretary of administration shall lapse from the appropriation under s. 20.515 (2) (g) to the general fund the amounts necessary to repay the loan under s. 601.34 when the secretary of administration, after consulting with the board, determines that funds in the appropriation under s. 20.515 (2) (g) are sufficient to make the lapse. The amounts that are required to be lapsed under s. 20.515 (2) (g) shall equal the amount necessary to pay all principal and interest costs on the loan, less any amount that is lapsed to the general fund under s. 20.515 (2) (a) at the end of the 2001-03 fiscal biennium. The secretary of administration may lapse the amounts under s. 20.515 (2) (g) in installments.

AB876, s. 13 Section 13. 149.12 (1) (intro.) of the statutes is amended to read:

AB876,11,8 149.12 (1) (intro.) Except as provided in subs. (1m) and, (2), and (4), the board or plan administrator shall certify as eligible a person who is covered by medicare because he or she is disabled under 42 USC 423, a person who submits evidence that he or she has tested positive for the presence of HIV, antigen or nonantigenic products of HIV, or an antibody to HIV, a person who is an eligible individual, and any person who receives and submits any of the following based wholly or partially on medical underwriting considerations within 9 months prior to making application for coverage by the plan:

AB876, s. 14 Section 14. 149.12 (4) of the statutes is created to read:

AB876,11,17 149.12 (4) Notwithstanding subs. (1) to (3), the board may, in its discretion, certify as eligible for coverage under the plan a person who applies for coverage after his or her enrollment in the program under s. 635.30 is terminated under s. 635.30 (4) (b), regardless of whether the person satisfies the eligibility requirements under subs. (1) to (3). The board shall determine whether a person who obtains coverage under the plan under this subsection and who does not satisfy the eligibility requirements under subs. (1) to (3) may remain covered under the plan after the program under s. 635.30 is no longer in operation.

AB876, s. 15 Section 15. 149.14 (6) (a) of the statutes is amended to read:

AB876,11,23 149.14 (6) (a) Except as provided in par. pars. (b) and (c), no person who obtains coverage under the plan may be covered for any preexisting condition during the first 6 months of coverage under the plan if the person was diagnosed or treated for that condition during the 6 months immediately preceding the filing of an application with the plan.

AB876, s. 16 Section 16. 149.14 (6) (c) of the statutes is created to read:

AB876,12,5 149.14 (6) (c) A person who obtains coverage under the plan under s. 149.12 (4) and whose application for coverage was received within 63 after his or her enrollment in the program under s. 635.30 was terminated under s. 635.30 (4) (b), may not be subject to any preexisting condition exclusion under the plan, as provided in s. 635.30 (4) (b).

AB876, s. 17 Section 17. 601.34 of the statutes is created to read:

AB876,12,21 601.34 Loan to general fund. No later than the first day of the 2nd month after the effective date of this section .... [revisor inserts date], an amount equal to $850,000 shall be lapsed from the appropriation account under s. 20.145 (1) (g) to the general fund. The amount lapsed from the appropriation account shall be considered a loan to the general fund and interest shall accrue on the amount lapsed at the average rate earned by the state on its deposits in the state investment fund during the period of the loan. The general fund shall repay the loan from moneys lapsed to the general fund from the appropriation under s. 20.515 (2) (a) at the end of the 2001-03 fiscal biennium, if any, and from moneys lapsed to the general fund from the appropriation under s. 20.515 (2) (g) in the amounts specified in s. 40.98 (6m). If the secretary of administration determines that the moneys lapsed from these appropriations will not be sufficient to repay the loan within a reasonable period of time, as determined by the secretary and the commissioner, the secretary shall credit the appropriation account under s. 20.145 (1) (g) from moneys in the general fund an amount sufficient to repay the loan.

AB876, s. 18 Section 18. 632.835 (2) (b) of the statutes, as created by 1999 Wisconsin Act 155, is amended to read:

AB876,13,6 632.835 (2) (b) Whenever If 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.

AB876, s. 19 Section 19. 632.835 (2) (bg) of the statutes is created to read:

AB876,13,11 632.835 (2) (bg) Notwithstanding par. (b), an insurer is not required to provide the notice under par. (b) to an insured who uses the internal grievance procedure under s. 632.83 until the insurer sends it notice of the disposition of the internal grievance if all of the following apply:

AB876,13,16 1. The health benefit plan issued by the insurer contains a description of the independent review procedure under this section, including an explanation of the insured's rights under par. (d), how to request the review, the time within which the review must be requested, and how to obtain a current listing of independent review organizations certified under sub. (4).

AB876,13,19 2. The insurer includes on its explanation of benefits form a reference to the section of the policy or certificate that contains the description of the independent review procedure.

AB876, s. 20 Section 20. 635.25 of the statutes is created to read:

AB876,13,22 635.25 Catastrophic risk. (1) Definition. In this section, "board" means the small employer catastrophic reinsurance board.

AB876,14,2 (2) Thresholds for covered benefits. (a) By December 1, 2002, and every 2 years thereafter until December 1, 2006, every small employer insurer shall select, and submit a report to the commissioner that specifies, the small employer insurer's threshold level of covered benefits, which may be any of the following:

AB876,14,3 1. Fifty thousand dollars in a calendar year.

AB876,14,4 2. One hundred thousand dollars in a calendar year.

AB876,14,5 3. One hundred fifty thousand dollars in a calendar year.

AB876,14,6 4. Two hundred fifty thousand dollars in a calendar year.

AB876,14,9 (b) The threshold level of benefits specified in a report under par. (a) shall apply to each insured under every group health benefit plan issued to a small employer in this state by the small employer insurer submitting the report.

AB876,14,19 (c) For each of the 2 calendar years after the year in which a small employer insurer submits a report under par. (a), if the amount of covered benefits paid in a calendar year, beginning with 2004 and ending with 2008, by the small employer insurer on behalf of any insured under any group health benefit plan to which this section applies exceeds the threshold level of covered benefits specified in the report, the commissioner, at the direction of the board, shall reimburse the small employer insurer from the appropriation under s. 20.145 (1) (j), in accordance with the procedures established by rule under sub. (5) (e), for 80% of the amount paid by the small employer insurer in that calendar year in excess of the threshold level specified in the report.

AB876,14,23 (3) Premiums for reimbursements. (a) For every group health benefit plan issued or renewed to a small employer in this state on or between the dates specified by rule under sub. (5) (b), a small employer insurer shall charge a total premium that includes the premium amount established by rule under sub. (5) (a).

AB876,15,3 (b) By the date specified by rule under sub. (5) (c), a small employer insurer shall forward to the board the premiums established by rule under sub. (5) (a), in the manner required by rule under sub. (5) (d). The board shall credit all premium amounts received under this paragraph to the appropriation account under s. 20.145 (1) (j).

AB876,15,7 (c) In addition to the disclosures required under s. 635.11, before the issuance or renewal of a group health benefit plan to a small employer in this state on or between the dates specified by rule under sub. (5) (b), a small employer insurer shall disclose to the small employer all of the following:

AB876,15,9 1. The small employer insurer's current threshold level of covered benefits under sub. (2) (a) and the calendar years to which it applies.

AB876,15,12 2. The amount of the total premium that is attributable to coverage for the small employer insurer's threshold level of covered benefits and 20% of covered benefits in excess of that threshold level.

AB876,15,14 3. The amount of the total premium that is the premium amount established by rule under sub. (5) (a).

AB876,15,21 (4) Provider discounts. (a) The commissioner by rule shall establish provider discount rates for charges for covered services provided to insureds under group health benefit plans that are issued or renewed to small employers in this state on or between the dates specified by rule under sub. (5) (b). The commissioner may establish higher provider discount rates for covered benefits under group health benefit plans that are issued by small employer insurers that specify higher threshold levels under sub. (2) (a).

AB876,16,2 (b) Except for copayments, coinsurance, or deductibles required or authorized under a group health benefit plan, a provider of a covered service, drug, or device shall accept as payment in full for the covered service, drug, or device the discounted payment rate under par. (a) and may not bill the insured under the group health benefit plan who receives the service, drug, or device for any amount by which the charge is reduced under par. (a).

AB876,16,4 (5) Rules. The commissioner shall promulgate rules developed by the board for the operation of this section, including rules that do all of the following:

AB876,16,9 (a) Establish and periodically adjust the premium amounts that must be charged to small employers under sub. (3) (c) 3. The premium amounts under sub. (3) (c) 3. shall be based on an actuarily sound charge per covered individual that is calculated to generate sufficient moneys, in conjunction with provider discounts under sub. (4), to cover the reimbursements required under sub. (2) (c).

AB876,16,11 (b) Specify the dates that apply in sub. (3) (a), subject to the dates specified in par. (c) and sub. (2) (c).