AB925: Bill Text

AB925,14,18 (a) The need to reduce the rate of hospital cost increases while preserving the quality of health care in all parts of the state and taking into account the financial viability of economically and efficiently operated hospitals.

AB925,14,23 (b) Comparisons with prudently administered hospitals of similar size or providing similar services that offer quality health care with sufficient staff. In classifying hospitals according to size and services, the commission shall consider volume, intensity, and educational programs and special services provided by hospitals.

AB925,14,25 (c) A variety of cost-related trend factors based on nationally or regionally recognized economic models.

AB925,15,1 (d) Special circumstances of rural hospitals and teaching hospitals.

AB925,15,2 (e) Past budget and rate experiences of the hospital.

AB925,15,4 (f) Findings of the utilization review program under s. 150.66 (3) concerning the hospital that submits the rate request.

AB925,15,6 (2) After reviewing a hospital's proposed financial requirements, the commission may disallow any of the following:

AB925,15,8 (a) Costs associated with medical services that a utilization review program under s. 150.66 determines are medically unnecessary or inappropriate.

AB925,15,14 (b) 1. Except as provided in subd. 2., 40% of the amount by which patient revenue generated by the hospital during its previous fiscal year exceeds 104% of the hospital's budgeted patient revenue for that year, if the hospital's annual gross patient revenue, as adjusted under s. 150.68, is less than $5,000,000, or exceeds 102% of the hospital's budgeted patient revenue for that year, if the hospital's annual gross patient revenue, as adjusted under s. 150.68, equals or exceeds $5,000,000.

AB925,15,17 2. The commission shall promulgate rules to specify a procedure under which hospitals whose variable costs exceed 65% are subject to a lesser disallowance under subd. 1.

AB925,15,19 (c) Rate overcharges of the hospital that occurred in a prior year and for which payers have not been reimbursed.

AB925,15,23 (d) The amount by which incremental expenses that are associated with the cost of a project that must be approved under s. 150.71 (1) exceed 105% of the expenses projected in the hospital's application for approval of the project. This paragraph does not apply if any of the following applies:

AB925,15,25 1. The hospital demonstrates to the satisfaction of the commission that the excess was due to conditions beyond its control.

AB925,16,1 2. The excess occurs more than 3 years after completion of the project.

AB925,16,2 (e) Costs that the commission determines are unreasonable.

AB925,16,9 (f) Excessive wages. In determining whether wages are excessive under this paragraph, the commission shall consider the wage levels of hospitals located in a relevant geographic area surrounding the hospital that submitted the rate request as well as wage levels of hospitals that are similar in size or that provide similar services. In addition, the commission shall consider the hospital's ability to attract adequate staff and the wage trends in nonregulated, related sectors of the state economy.

AB925,16,10 (g) Amounts paid for services regulated under s. 111.18 (2) (a) 1.

AB925,16,16 (3) (a) After reviewing the hospital's financial requirements and rate request, the commission staff shall suggest to the commission any disallowances authorized under sub. (2) and shall submit a rate recommendation to the hospital and commission. If the rate recommended by the commission staff differs from the rate request submitted by the hospital, the commission staff shall provide an explanation for the difference.

AB925,16,22 (b) 1. Except as provided in subd. 2., the commission staff shall submit its recommendations under par. (a) no later than 60 days after the date that review commences under s. 150.62 (1), even if the commission staff determines that the data provided by the hospital for a scheduled review are incomplete. The commission staff may, however, recommend a disallowance or an alternate rate, including no rate increase, on the grounds of insufficient data.

AB925,16,25 2. a. The commission staff may extend the deadline specified in subd. 1. by 15 days if it determines that the rate request submitted involves particularly complex issues of fact.

AB925,17,2 b. The deadline specified in subd. 1. may be extended with the consent of the hospital and the commission staff.

AB925,17,11 150.635 Review of rate recommendations. (1) A hospital that disputes any part of a recommendation of the commission staff under s. 150.63 shall, no later than 10 days after the recommendations are submitted under s. 150.63 (3), request a settlement conference with the commission staff for the purpose of resolving the differences in the hospital's rate request and the commission staff's recommendation. The chairperson of the commission, or a commissioner designated by the chairperson, shall preside over the settlement conference. No later than 20 days after the hospital requests a settlement conference, the settlement conference shall be completed.

AB925,17,18 (2) No later than 10 days after completion of the settlement conference under sub. (1), the hospital may request a hearing before the commission under sub. (3). Upon receipt of a request, the commission shall grant a hearing to the hospital. The hospital may present testimony based on any standard for decision making specified in s. 150.63 (1). All questions of fact shall be determined without ascribing greater weight to evidence presented by commission staff than to evidence presented by any other party solely due to its presentation by the staff.

AB925,17,24 (3) (a) Informal hearings shall be conducted before at least 2 commissioners. Sworn testimony is required only if the presiding commissioners so specify. The commissioners may establish time limits for cross-examination of witnesses and rebuttal arguments and may limit the number of persons who may appear at the hearing. Rules of evidence, except the rule that evidence be relevant to the issues presented, do not apply to informal hearings.

AB925,18,8 (b) A hospital that requests an informal hearing shall present the reasons supporting its proposed rate increase and financial requirements. Commission staff shall respond by explaining the alternate recommendations. Within the time limits established under par. (a), the hospital, parties to the review, and commission staff may cross-examine witnesses and rebut arguments presented. The hospital, parties to the review, and the commission staff may employ experts to present their position. The presiding commissioners may impose an overall time limit on the length of the hearing.

AB925,18,10 (c) The commission may conduct a class 1 contested case proceeding under ch. 227 in place of an informal hearing under pars. (a) and (b).

AB925,18,15 (4) The commission shall keep a complete written record of all hearings and investigations conducted under sub. (3). The commission shall provide a transcribed, certified copy of all or any part of the record at the request of any person who is a party to the hearing or investigation. The commission may charge a fee to cover the costs of providing copies of the record.

AB925,18,20 (5) (a) Any person may request a hearing under s. 227.44, regardless of whether any other hearing is authorized by law or is authorized at the discretion of the commission or whether any other proceeding is authorized by rule of the commission, except that no person may receive more than one contested case hearing concerning a particular act or failure to act by the commission.

AB925,18,22 (b) Notwithstanding par. (a), no person may request a hearing under s. 227.44 pertaining to the subject matter of a hearing under sub. (3).

AB925,18,24 (c) The right to a hearing under s. 227.44, as specified in this subsection, applies only to subject matter pertaining to this subchapter.

AB925,19,13 150.64 Commission orders. (1) (a) The commission shall determine allowable financial requirements and disallowances under s. 150.63 (1) and (2) for the hospital. From the difference between these amounts, the commission shall subtract the hospital's estimated relief payments and medical assistance payments under ch. 49 and medicare payments under 42 USC 1395 to 1395ccc, unless the commission determines that the hospital's estimates are incorrect, in which case the commission shall subtract its own estimates of the hospital's relief, medical assistance, and medicare payments. The commission shall, by order, establish maximum rates that allow the hospital to generate revenue sufficient to provide this remainder. The commission shall, by rule, establish acceptable methods for hospitals to use in estimating payments by relief, medical assistance, and medicare under this paragraph. Each hospital shall choose one of the methods and use it consistently unless the commission authorizes the hospital to change the method.

AB925,19,22 (b) Unless the hospital requests a hearing under s. 150.635 (2), the commission shall issue an order under par. (a) no later than 15 days after the commission staff submits its recommendations under s. 150.63 (3) (b) or, if the hospital requests a settlement conference under s. 150.635 (1), no later than 15 days after the commission determines that the hospital will not seek a hearing following the conclusion of the settlement conference. If the hospital disputes only part of the recommendations of the commission staff, the commission may establish maximum rates under par. (a) concerning the recommendations that the hospital agrees with prior to the conclusion of the hearing under s. 150.635 (3).

AB925,20,2 (c) If the commission conducts a hearing under s. 150.635 (3) (c), the commission shall establish by order maximum rates for the hospital's year under review at the conclusion of the hearing. If the commission conducts an informal hearing under s. 150.635 (3) (a) and (b), the commission shall issue its order no later than 50 days after the date on which the hospital requested the hearing.

AB925,20,6 (d) Each order that the commission issues concerning financial requirements and rates shall state findings of fact and the reasons supporting the order. If the commission denies any part of a rate request, the order shall also specify any financial requirements that were disallowed.

AB925,20,25 (e) A hospital may apply an increase in its rates selectively, if the aggregate increase in its rates does not exceed the amount authorized by the commission. No hospital may change a method of applying its rate increase that has received the commission's approval without submitting the changes to the commission for its approval under this paragraph. Prior to increasing rates or changing a method of applying a rate increase, the hospital shall explain to the commission the method of applying the rate increase. If, after 5 working days, as defined in s. 227.01 (14), the commission does not notify the hospital that it has not approved the hospital's rate increase, the hospital may increase its rates as proposed and the commission may not challenge the method prior to the date of a succeeding review under s. 150.62 (1) except as provided in sub. (4) (a). If the commission does not approve the hospital's method of applying the rate increase, the commission shall recommend an alternate method. If the hospital does not modify its method of applying the rate increase, the commission may challenge the method in circuit court. If the hospital's method generates an aggregate increase in the hospital's rates that is inconsistent with the amount authorized by the commission, the hospital is subject to a forfeiture equal to 50% of the amount overcharged and shall comply with the alternate method recommended by the commission or with any other method ordered by the court that the court finds more consistent with the commission's order.

AB925,21,5 (f) A hospital that receives approval of a rate increase that may commence only between the 2nd and 7th months of its fiscal year may make an adjustment to the rate increase for that fiscal year only to generate an amount of revenue equal to the amount that would have been generated if the hospital could have commenced the rate increase beginning with the first month of its fiscal year.

AB925,21,9 (g) Except as provided in s. 150.65, if a party seeks judicial review of a commission order, the affected hospital may continue to bill payers at the rates established by the commission. No hospital that bills payers under this paragraph adversely affects its right to contest the rates established by the commission.

AB925,21,12 (2) Notwithstanding sub. (1) and ss. 150.62, 150.63, and 150.635, at the request of a hospital the commission may waive the procedures for review of a rate request and issue an interim order if the commission determines that an emergency exists.

AB925,21,17 (3) The commission may promulgate rules to establish a system that defines rates as aggregate charges based on case mix measurements if the commission submits its proposed system to the joint committee on finance for review and if the committee approves the system. The system shall be consistent with the standards specified under s. 150.63 (1).

AB925,21,18 (4) The commission may not do any of the following:

AB925,21,22 (a) Reduce rates established prior to the date the commission schedules a review under s. 150.62 (1), unless the hospital misstated a material fact at a prior rate-setting proceeding. Projections on the volume of hospital services utilized do not constitute material facts under this paragraph.

AB925,21,24 (b) Reduce rates established in a previous review under s. 150.62 (1) unless any of the following apply:

AB925,22,2 1. The hospital implements an unauthorized rate increase in its approved rates, unless the increase is trivial.

AB925,22,4 2. The hospital uses moneys that it has prospectively accumulated for an authorized capital project for purposes other than the authorized project.

AB925,22,6 3. The hospital's actual total revenue for its fiscal year exceeds its actual total financial requirements by more than 10%.

AB925,22,8 (c) Interfere directly in the personal or decision-making relationships between a patient and the patient's physician, except as provided in s. 150.66.

AB925,22,10 (d) Control directly the volume or intensity of hospital utilization, except as provided in s. 150.66.

AB925,22,14 (e) Restrict the freedom of patients to receive care at a hospital consistent with their religious preferences or request a hospital that is affiliated with a religious group to act in a manner contrary to the mission and philosophy of the religious group.

AB925,22,17 (f) Restrict directly the freedom of a hospital to exercise management decisions in complying with the rates established by the commission, unless the hospital agrees to a condition attached to the establishment of the rates.

AB925,22,19 (g) Require the submission of unrelated financial data from religious groups affiliated with a hospital.

AB925,22,22 150.65 Injunctions of commission orders. No injunction may be issued to suspend or stay enforcement of an order of the commission unless all of the following occur:

AB925,23,2 (1) All parties to the review under s. 150.62 (1) (b) from which the commission's order was issued are notified of the petition seeking an injunction, are given an opportunity to appear at a hearing prior to the issuance of the injunction, and are made parties to the proceeding in circuit court.

AB925,23,7 (2) If the party seeking the injunction is not the hospital that was a party to the proceeding from which the commission's order was issued, the party enters into an undertaking by at least 2 sureties at a level that the circuit court finds sufficient to guarantee the payment of all damages that the hospital may sustain by delaying the effect of the commission's order.

AB925,23,11 150.655 Expedited review, expedited cases and exempt hospitals. (1) Notwithstanding s. 150.635, the commission may promulgate rules under which hospitals meeting specific criteria receive expedited review of rate requests under this subchapter.

AB925,23,15 (2) (a) Notwithstanding s. 150.62, a hospital that has gross annual patient revenue of less than $10,000,000, adjusted as provided in s. 150.67, for the hospital's last fiscal year is eligible to receive automatic approval of its rate request if all of the following criteria are met:

AB925,23,17 1. The commission has conducted a complete review of the hospital's rates and has set the hospital's rates in a preceding year.

AB925,23,20 2. The hospital requests a rate increase that is less than an inflationary index consisting of the average of the consumer price index and the hospital market basket index.

AB925,23,25 (b) A hospital that is eligible for automatic approval of its rate-increase request under this subsection shall, prior to implementing the increase, publish a class 1 notice under ch. 985, in one or more newspapers likely to give notice to its patients and payers, a list of the price adjustments it is making to 100 of its charge elements as specified by the commission.

AB925,24,2 (c) The commission may, by rule, extend automatic approval status under this subsection to other hospitals.

AB925,24,8 (3) Notwithstanding s. 150.62 (1), the commission may grant hospitals whose gross annual patient revenue is less than $10,000,000, adjusted as provided in s. 150.67, a rate increase that takes effect over a 2-year period with an automatic escalation clause taking effect at the end of the first year. A hospital that receives a 2-year rate increase is not required to request a rate increase at the end of the first year.

AB925,24,10 150.66 Utilization review program. (1) The commission shall approve and evaluate all-patient utilization review programs for each hospital.

AB925,24,16 (2) The commission shall contract with one or more independent utilization review programs to develop review standards, and the commission may contract with any person to monitor implementation of these programs by hospitals and to perform peer review functions for hospitals that fail to meet the performance standards adopted by the commission. The commission may not contract with state agencies, other than the University of Wisconsin System, under this subsection.

AB925,24,19 (3) Each utilization review program the commission approves shall include a general summary of utilization within the hospital. The programs shall meet minimum standards established by the commission and do all of the following:

AB925,24,21 (a) Evaluate the medical necessity or appropriateness of care relative to admissions, lengths of stay, and ancillary services.

AB925,24,24 (b) Report to the commission, in conjunction with each hospital's submission of proposed financial requirements, any unnecessary or inappropriate medical care utilization and associated costs.

AB925,25,6 (4) No hospital or physician may be paid for a service that a utilization review program under this section determines is medically unnecessary or inappropriate. If the hospital or physician has already been paid, the hospital or physician shall reimburse the payer within 30 days. The commission may commence an action to enforce this subsection in the circuit court for the county in which the hospital is located.

AB925,25,10 150.665 Enforcement and penalties. (1) (a) Until the commission establishes different rates under this subchapter, no hospital may charge any payer an amount exceeding the rates in effect as of the effective date of this paragraph .... [revisor inserts date].

AB925,25,18 (b) The attorney general may petition a court to enforce compliance with par. (a) and s. 150.612 (2) if the attorney general first notifies the hospital and provides the hospital a reasonable time to correct the violation. The commission may petition a court to enforce compliance with any statutory requirement or with any rule or order of the commission if it first notifies the hospital and provides the hospital a reasonable time to correct the violation. The commission shall commence any action under this paragraph in the circuit court for the county in which the hospital is located.

AB925,25,21 (c) A hospital that intentionally violates s. 150.612 (2) may be subject to a forfeiture of up to $5,000. Each week that a hospital intentionally violates s. 150.612 (2) is a separate violation.

AB925,25,24 (2) Any person who intentionally violates an order of a hearing examiner issued under s. 227.46 (7) to protect trade secrets in a contested case brought under this subchapter shall be subject to a forfeiture of $5,000.

AB925,26,4 150.67 Annual adjustments. The commission shall adjust annually the limits on gross annual patient revenue in ss. 150.63 (2) (b) and 150.65 (2) (a) and (3) to reflect annual changes in the average of the consumer price index and the hospital market basket index.

AB925,26,13 150.68 Assessments. Beginning July 1, 2002, the commission shall, within 90 days after the beginning of each fiscal year, estimate the total amount of revenue required for administration by the commission of this subchapter during that fiscal year and assess that estimated total amount to hospitals in proportion to each hospital's respective gross private-pay patient revenues during the hospital's most recently concluded fiscal year. The commission shall promulgate rules to establish the rate of the assessments under this section. Each hospital shall pay the assessment by December 1 of the year in which the assessment is made. The assessments shall be credited to the appropriation account under s. 20.438 (1) (g).

AB925,26,17 150.71 Approval required. (1) Beginning on the effective date of this subsection .... [revisor inserts date], no person may do any of the following unless the person applies for and receives the department's approval as specified under this subchapter:

AB925,26,21 (a) Except as provided in s. 150.713 and subject to sub. (2), by or on behalf of a hospital, obligate for a capital expenditure more than $1,000,0000, unless the capital expenditure is to convert a hospital to a new use or to renovate part or all of a hospital.

AB925,26,24 (b) Except as provided in s. 150.713 and subject to sub. (2), by or on behalf of a hospital, obligate for a capital expenditure more than $1,500,000 to convert a hospital to a new use or to renovate part or all of a hospital.

AB925,27,3 (c) Implement an organ transplant program, a burn center, a neonatal intensive care program, a cardiac program, or air transport services or add psychiatric or chemical dependency beds.

AB925,27,4 (d) Purchase or otherwise acquire a hospital.

AB925,27,5 (e) Construct or operate an ambulatory surgery center or a home health agency.

AB925,27,12 (2) The cost of studies, surveys, plans, and other activities essential to a proposed capital expenditure specified under sub. (1) (a) or (b) shall be included in determining the value of the capital expenditure. A capital expenditure includes any donation of equipment or facilities that, if acquired directly, would be subject to review under this subchapter and any transfer of equipment or facilities for less than fair market value that, if transferred at fair market value, would be subject to review under this subchapter.

AB925,27,17 150.713 Exceptions. (1) A person who has, prior to the effective date of this subsection .... [revisor inserts date], entered into a legally enforceable contract, promise, or agreement to do any of the activities specified in s. 150.71 (1), is not required to apply for or receive the department's approval under this subchapter to do any of the activities agreed to in the contract, promise, or agreement.

AB925,27,23 (2) A person may obligate for a capital expenditure, by or on behalf of a hospital, without first obtaining the department's approval under this subchapter, not more than 20% of the hospital's gross annual patient revenue for its last fiscal year if the expenditure is for heating, air conditioning, ventilation, electrical systems, energy conservation, telecommunications, computer systems, or nonsurgical outpatient services and is not a component of another project specified in s. 150.71 (1).

AB925,28,2 (3) A person who receives an exemption from the department under s. 150.715 is not required to apply for or receive the department's approval to obligate a capital expenditure on behalf of a hospital or to make a substantial change in a health service as specified in the exemption.

AB925,28,3 150.715 Innovative medical technology exemption. (1) In this section:

AB925,28,8 (a) "Clinical trial" means clinical research conducted under approved protocols in compliance with federal requirements that are applicable to investigations involving human subjects, including the requirements for an informed consent advising the patient clearly of the risks associated with participating in the clinical research.

AB925,28,11 (b) "Innovative medical technology" means equipment or procedures that are potentially useful for diagnostic or therapeutic purposes and that introduce new technology in the diagnosis and treatment of an illness.

AB925,28,15 (2) The department may grant any person who intends to undertake a capital expenditure of more than $500,000, or who intends to make a substantial change in a health service, an exemption from the requirements of s. 150.71 if the person meets all of the following requirements:

AB925,28,19 (a) The capital expenditure or substantial change in a health service is for the research, development, and evaluation of innovative medical technology, the development of clinical applications of the technology, or the research, development, and evaluation of a major enhancement to existing medical technology.

AB925,28,20 (b) The person submits an application for an exemption to the department.

AB925,28,24 (c) The person demonstrates that, prior to applying for an exemption, preliminary animal studies or preliminary clinical investigations establish that the innovative medical technology or major enhancement to existing medical technology has a reasonable probability of advancing clinical diagnosis or therapy.