2011 - 2012 LEGISLATURE
February 10, 2012 - Introduced by Representatives Nygren, Ballweg, Bies,
Brooks, Endsley, LeMahieu, Petersen, Severson, Van Roy, Wynn
and Vos.
Referred to Committee on Insurance.
AB554,1,6 1An Act to repeal 49.475 (1) (ag) and 49.475 (1) (am); to amend 49.475 (title),
249.475 (1) (c) (intro.), 49.475 (1) (c) 2., 49.475 (1) (d), 49.475 (1) (f) (intro.), 49.475
3(1) (f) 2. and 49.475 (1) (f) 3.; and to create 49.475 (1) (f) 5., 49.475 (1) (f) 6. and
449.475 (1) (f) 7. of the statutes; relating to: the provision of information
5regarding health care benefits provided to certain assistance program
Analysis by the Legislative Reference Bureau
Under current law, as a condition of doing business in this state, certain payers
of health care benefits (called third parties) must provide to the Department of
Health Services (DHS) information from their records to enable DHS to ascertain
whether an individual, or his or her spouse or dependent, who has been or is a
recipient under an assistance program, has received or is receiving health care
coverage or benefits from a third party. The assistance programs for which DHS
seeks information about recipients are the Medical Assistance (MA) program,
including the Badger Care health care program, Family Care, Senior Care, the
Well-Woman Program, and the program that provides financial assistance for the
cost of medical care to persons with chronic kidney disease, cystic fibrosis, and
hemophilia. The third parties may receive compensation for providing the
information, must provide the information within certain deadlines, and may be
subject to enforcement proceedings for noncompliance. The third parties must

accept assignment to DHS of a recipient's right to receive payment from the third
party for a health care item or service for which payment under an assistance
program has been made, as well as the right of DHS to recover any third-party
payment made for which assignment had not been accepted, and may not deny a
DHS claim on the basis of certain circumstances, if submitted less than 36 months
after the health care item or service is provided and if action by DHS to enforce its
rights is commenced less than 72 months after DHS submits the claim.
This bill makes modifications to the third parties that are required to provide
information to DHS and from which DHS may recover payments for health care
services provided to recipients. Under current law, a third party is defined as an
insurer, an employee benefit plan, a service benefit plan, or a pharmacy benefits
manager. A service benefit plan, which is a plan providing health care benefits to
federal government employees, is defined by a reference to federal law. The bill
corrects the federal law citation for the definition. An employee benefit plan is also
defined by a reference to federal law. The bill changes the federal law citation so that
government-provided health care plans, which are exempted under the current law
definition, are included. The bill also changes the definition of a pharmacy benefits
manager, which, under current law, includes a person that performs pharmacy
benefits management functions with respect to prescription drug benefits that are
provided by a nonprofit hospital, an employer, a labor union, or another organization.
The bill redefines a pharmacy benefits manager simply as an entity that administers
or manages prescription drug benefits provided by an insurer or other third party.
Finally, the bill adds three other types of third parties: an issuer of a health
insurance policy (called disability insurance policy in the statutes); a group health
plan, which is a health care plan that provides medical services, directly or through
insurance or reimbursement or otherwise, to employees, and specifically includes a
self-insured plan; and an entity that administers benefits on behalf of another
risk-bearing third party, including a third party administrator, a fiscal
intermediary, or a managed care contractor.
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:
AB554, s. 1 1Section 1. 49.475 (title) of the statutes is amended to read:
AB554,2,3 249.475 (title) Information about medical assistance program
AB554, s. 2 4Section 2. 49.475 (1) (ag) of the statutes is repealed.
AB554, s. 3 5Section 3. 49.475 (1) (am) of the statutes is repealed.
AB554, s. 4
1Section 4. 49.475 (1) (c) (intro.) of the statutes is amended to read:
AB554,3,72 49.475 (1) (c) (intro.) "Pharmacy benefits management" means the
3procurement of prescription drugs at a negotiated rate for dispensation in this state
4to covered individuals; the
administration or management of prescription drug
5benefits provided by a covered entity for the benefit of covered individuals; or an
6insurer or other 3rd party, including the performance of
any of the following services
7provided in the administration of pharmacy benefits:
AB554, s. 5 8Section 5. 49.475 (1) (c) 2. of the statutes is amended to read:
AB554,3,119 49.475 (1) (c) 2. Claims processing, retail network management, and or
10payment of claims to pharmacies for prescription drugs dispensed to covered
AB554, s. 6 12Section 6. 49.475 (1) (d) of the statutes is amended to read:
AB554,3,1413 49.475 (1) (d) "Pharmacy benefits manager" means a person an entity that
14performs pharmacy benefits management functions.
AB554, s. 7 15Section 7. 49.475 (1) (f) (intro.) of the statutes is amended to read:
AB554,3,1816 49.475 (1) (f) (intro.) "Third party" means an entity that by statute, rule, or
17contract, or agreement is responsible for payment of a claim for a health care item
18or service. "Third party" includes all, including any of the following:
AB554, s. 8 19Section 8. 49.475 (1) (f) 2. of the statutes is amended to read:
AB554,3,2220 49.475 (1) (f) 2. An employee benefit plan described, as defined in 29 USC 1003
21(a) that is not exempt under 29 USC 1003 (b) and is not a multiple employer welfare
22arrangement 1002 (3).
AB554, s. 9 23Section 9. 49.475 (1) (f) 3. of the statutes is amended to read:
AB554,3,2524 49.475 (1) (f) 3. A service benefit plan, as specified in 42 USC 1396a (25) (I)
25defined in 5 USC 8903 (1).
AB554, s. 10
1Section 10. 49.475 (1) (f) 5. of the statutes is created to read:
AB554,4,32 49.475 (1) (f) 5. A group health plan, as defined in 29 USC 1191b (a) (1),
3including a self-insured plan.
AB554, s. 11 4Section 11. 49.475 (1) (f) 6. of the statutes is created to read:
AB554,4,55 49.475 (1) (f) 6. The issuer of a disability insurance policy.
AB554, s. 12 6Section 12. 49.475 (1) (f) 7. of the statutes is created to read:
AB554,4,97 49.475 (1) (f) 7. An entity that administers benefits on behalf of another
8risk-bearing 3rd party, including a 3rd party administrator, a fiscal intermediary,
9or a managed care contractor.
AB554,4,1010 (End)