Effect on Small Business (Initial Regulatory Flexibility Analysis)
The proposed rules will affect dental hygienists who perform services as independent contractors, and dentists. The Department believes that the proposed rules will have a positive effect on dental hygienists performing services as independent contractors, and dentists. Dental hygienists will enjoy increased opportunities to independently contract their services. Dentists will experience a reduction in paperwork and administrative staff time associated with participation in Wisconsin Medicaid and BadgerCare. The proposed rules do not impose reporting requirements or schedules.
The Department does not anticipate that the proposed rules will affect local government or private sector costs. The Department does, however, anticipate that the proposed rules will increase costs to the Department. The GPR share of increased costs was calculated at the SFY 2004 blended rate of 36.4%, and based on the following assumptions that have been updated since April 14, 2005, when the original fiscal estimate was submitted, with proposed rules, to the Legislative Council Clearinghouse. The updated fiscal estimate is attached to this notice of hearing.
Assumptions used in Arriving at Fiscal Estimate
Certifying Dental Hygienists as MA Providers
10 hygienists employed by local health departments, or other allowable practice settings, would certify as Medicaid providers in first year of biennium; 10 additional would begin in second year. (Some additional hygienists currently billing under HealthCheck nursing agency provider numbers could shift to individual certification, but this shift would have no net fiscal effect.)
Hygienists would treat an average of 16 MA enrolled children per month and 10 MA enrolled adults per month.
Hygienists would provide an average of 1 evaluation, 2 fluorides, and 4 sealants per MA-enrolled child per year, and an average of 1 evaluation, 4 cleanings, and 4 fluorides per MA-enrolled adult per year.
Revising Prior Authorization for Dental MA Program
Services where PA was denied, or returned and not resubmitted (estimated to be 50% of returned details) under old rules would be paid under new rules.
Quantity of services requested on denied or returned and not resubmitted requests is equal to the weighted average of quantity of services requested on approved requests. Services that are requested for multiple years are performed at the maximum allowable number of times per year.
This estimate does not assume an increase in the number of Medicaid-certified dentists due to the rule change. However, to the extent that this rule change increases the number of dentists participating in Medicaid, the cost of the change would increase.
Long Range Fiscal Implications
Increased cost of approximately $938,000 AF ($341,000 GPR) in the 2005-2007 biennium, assuming a March 2006 effective date.
Long-term costs may decline as future disease burden declines due to increased provision of early preventive treatment.
(1) Increased cost of approximately $460,000 AF ($168,000 GPR) in the 2005-2007 biennium, assuming a March 2006 effective date.
For More Information
A copy of the full text of the rules and the updated fiscal estimate, and other documents associated with this rulemaking may be obtained, at no charge, from the Wisconsin Administrative Rules website at http://adminrules.wisconsin.gov
. At this website you can also register to receive email notification whenever the Department posts new information about this rulemaking and, during the public comment period, you can submit comments on the rulemaking order electronically and view comments that others have submitted about the rule.
A copy of the full text of the rule and the updated fiscal estimate may also be obtained by contacting the Department's representative listed below:
Andrew Snyder, Dental Policy Analyst
Division of Health Care Financing
Bureau of Fee-for-Service Health Care Benefits
1 West Wilson Street
P.O. Box 309
Madison, WI 53701-0309
Small Business Regulatory Coordinator:
Notice of Hearing
Notice is hereby given that pursuant to the authority granted under s. 601.41 (3)
, Stats., and the procedures set forth in under s. 227.18
, Stats., OCI will hold a public hearing to consider the adoption of the attached proposed rulemaking order affecting ch. Ins 9
, Wis. Adm. Code, relating to defined network and preferred provider plans and may affect small businesses.
Date: July 27, 2005
Time: 1:00 p.m., or as soon thereafter as the matter may be reached
Place: OCI, Room 227, 125 South Webster St 2nd Floor, Madison, WI
Written comments or comments submitted through the Wisconsin Administrative Rule website at: https://adminrules.wisconsin.gov
on the proposed rule will be considered. The deadline for submitting comments is 4:00 p.m. on the 14th
day after the date for the hearing stated in this Notice of Hearing.
Written comments should be sent to:
Julie E. Walsh
Legal Unit - OCI Rule Comment for Rule Ins 9
Office of the Commissioner of Insurance
PO Box 7873
Madison WI 53707-7873
Analysis Prepared by the Office of the Commissioner of Insurance (OCI)
3. Explanation of the OCI's authority to promulgate the proposed rule under these statutes: The Commissioner of Insurance is authorized to promulgate rules under s. 601.41
, Stats. Section 609.20
, Stats., permits the Commissioner to promulgate rules relating to preferred provider plans and defined network plans in order to ensure enrollee access to health care services and ensure continuity of health care while recognizing the differences between preferred provider plans and defined network plans.
4. Related Statutes or rules: There are no related statutes or rules.
5. The plain language analysis and summary of the proposed rule: Many of the proposed revisions to sections within s. Ins 3.67
, ch. Ins 9
and s. Ins 18 are due to a change in terminology. The term “managed care plan" has been replaced with “defined network plan" in Ch. 609
, Stats., established by 2001 Wisconsin Act 16
, therefore, necessitating change within the insurance administrative code. In addition many revisions have been made to Ch. Ins 9
to reflect the changes enacted by 2001 Wisconsin Act 16
including modifications reflecting the unique nature of preferred provider plans and changes in the market place since 2001 including regulatory changes that enhance consumer protection enacted by surrounding states.
Finally, the proposed rule reflects numerous modifications arising from a cooperative effort of the Commissioner and representatives from the insurance industry. Since November 2004, four public working meetings have been held to discuss each section of the proposed rule. Each public meeting was attended by the Commissioner and his staff and representatives from the Wisconsin Association of Life and Health Insurers (WALHI), Council for Affordable Healthcare and Wisconsin Association of Provider Networks (WAPN) as well as representatives from no less than seven (7) domestic and non-domestic health insurers. Additional work groups comprised of representatives from industry and the Office met two additional times to work on the ancillary provider language and criteria for preferred provider plans. Participants at the open meetings were invited to comment and make recommendations or specific modifications to the proposed rule. Candid discussion provided both the Commissioner and the industry opportunity to voice support or concerns over each section of the rule. The public working meetings also gave both industry and the Commissioner the opportunity to share its respective views of the marketplace. Discussion often focused on how proposed and revised language affects the industry and its ability to function in the marketplace with the guiding statutory requirements and consumer concerns as reflected in complaints received by the OCI to maintain the proper balance in the proposed regulations. At each meeting revisions that had previously been discussed were reviewed, comment invited with extensive dialogue from both industry and OCI. At the end of the last working public meeting held May 9, 2005, the Commissioner invited written comment on the entire proposed rule. The comment period was intended to provide industry with time to reflect on the proposed rule and offer specific thoughtful revisions or recommendations and then permit the Commissioner time to review the suggested revisions and recommendations prior to issuing the Notice of Hearing for the rule. The culmination of those meeting, including written comments received throughout the last year, is reflected in this proposed rule.
The proposed rule defines preferred provider plans starting with the definition at s. 609.01
, Wis. Stats., and clarifies and interprets the statutory requirements. Insurers offering preferred provider plans cannot require a referral to obtain coverage for care from either a participating or nonparticipating provider. If the preferred provider uses utilization management, including preauthorization or similar methods, for denying access to or coverage of the services of nonparticipating providers without just cause and with such frequency as to indicate a general business practice, such methods shall result in the plan being treated by the Commissioner as a defined network plan and subject to all requirements of a defined network plan. The Commissioner recognizes that the utilization management and preauthorization as appropriate tools for controlling costs of the insurer and may protect enrollees from incurring additional costs for care. Therefore the proposed rule does not prohibit or limit the proper use of utilization management or preauthorization. OCI will, however, track insurers' use of these tools through complaints and market conduct examination to determine if the insurer has developed a pattern, without just cause, for denying coverage. If such a pattern is uncovered then the insurer would be subject to regulation as a defined network plan.
The proposed rule reflects the amendments within Ch. 609
, Stats., by delineating unique reporting and other regulatory requirements between insurers that offer preferred provider plans versus other types of defined network plans. Significant provisions that demonstrate the unique regulatory treatment between defined network and preferred provider plans include: defined network plans are required to have quality assurance plans containing standards relating to access to care and continuity and quality of care while preferred provider plans are required to conduct remedial action plans and to develop procedures for remedial action to address quality problems; defined network plans must notify affected enrollees upon the termination of the provider from the plan and preferred providers may contract with another entity or providers to notify the enrollees of the termination, although the preferred provider does remain ultimately responsible for ensuring notifications are sent; defined network plans must report data similar to HEDIS for consumer information and preferred provider plans do not; both defined network plans and preferred provider plans are required to have sufficient number and type of providers within the network to adequately deliver all covered services, however, defined network plans must comply with all access standards while preferred provider plans need to have at least one participating primary care provider and one participating provider that has an expertise in obstetrics and gynecology that is accepting patients but the preferred provider plan need not offer a choice of participating providers.
In order for preferred provider plans to be regulated under the less rigorous regulatory requirements, the preferred provider plan must comply with the proposed regulatory requirements. Preferred provider plans must provide covered benefits without requiring the enrollee to obtain a referral or directing provider selection through the use of incentives including financial. The Commissioner recognizes that certain covered services may appropriately be best provided through contracted providers, for example the use of “Centers of Excellence" for transplants or cancer treatment. Further the mandated benefit for immunizations requires the insurer to offer as a covered benefit immunizations but the insurer need only cover the benefit when the immunization is given by a participating provider. Finally, some insurers offer services beyond the mandated limits as covered benefits with a greater disparity in coverage and may limit the expanded benefits to services received from participating providers. Therefore, the proposed rule creates a narrow exception to permit specific, limited services to be covered by participating providers with a greater disparity in coverage than when the services are provided by nonparticipating providers including the possibility of coverage only when the services are performed by a participating provider (i.e. immunizations).
As recognized by both the industry and by the Commissioner, deductibles and coinsurance are appropriate tools to steer enrollees towards participating providers. Although an appropriate tool, the differences between the deductible and coinsurance that an enrollee is required to pay when services are performed by a participating provider as compared nonparticipating providers should only be enough to create the incentive to utilize preferred providers. The Commissioner over the past year has received and reviewed numerous comments on where the line should be drawn to create the proper balance between the insurers desire to steer enrollees towards participating providers yet not so great that as a result enrollees are exposed to potentially significant financial penalties.
Therefore, the proposed rule requires the insurers offering preferred provider plans that desire to be subject only to the lesser regulatory requirements of preferred provider plans to comply with the following: coverage of the same benefits, unless specifically excepted, with the insurer paying not less than 60% coinsurance and the enrollee paying not more than 40% coinsurance for services performed by a nonparticipating provider. As an alternate, the insurer may pay not less than 50% coinsurance and the enrollee pay not more than 50% coinsurance for the services performed by a nonparticipating provider when the insurer provides the enrollee with a disclosure of limited coverage. Failure of the insurer to offer 60% coinsurance coverage without a disclosure notice or 50% coinsurance coverage with the disclosure notice will result in the insurer being treated as a defined network plan and not eligible for the lesser regulatory standards.
Additionally, the insurer offering a preferred provider plan that applies a coinsurance percentage when services are performed by nonparticipating providers at a different percentage than the coinsurance percentage that is applied when the services are performed by participating providers shall have the difference be no greater than 30%. If the percent difference is greater than 30% the insurer is required to provide the enrollee with a disclosure notice. If an insurer offering a preferred provider plan applies a deductible that is different for participating providers than for nonparticipating providers, the deductible for the same services when performed by a nonparticipating provider must be no more than 2 times greater or no more than $2000 more than the deductible that is applied when performed by a participating provider. If the insurer applies a deductible for services performed by a nonparticipating provider that is greater than 2 times or is more than $2000 different than the deductible that is applied when performed by participating providers, the insurer is required to provide the enrollee with a disclosure notice. The disclosure notice that is required to be given is contained within the rule and is similar to the notice provided in the state of Illinois.
A preferred provider plan must apply material exclusions, maximum limits or conditions to services regardless if the services are performed by either participating or nonparticipating providers and offers or uses no other incentives than the financial incentives of coinsurance and deductibles described above to encourage its enrollees to use participating providers. The exception to this requirement is for the steering of enrollees to Centers of Excellence for transplants and specified disease treatment services and immunizations pursuant to s. 632.895 (14)
, Stats., when insurer comply with disclosure requirements at the time the product is marketed, purchased and within the policy form in a prominent location.
Preferred provider plans shall include within the participating provider contracts a provision requiring the participating provider that schedules an elective procedure or other scheduled non-emergent care to fully disclose to the enrollee at the time of scheduling the name of each provider that will or may participate in the delivery of care and whether each provider is a participating or nonparticipating provider. The insurer shall include a disclosure, in a form consistent with the language contained in Appendix D, which informs enrollees of potential financial implications of using nonparticipating providers and to encourage the enrollee to contact the insurer for assistance in locating an appropriate participating provider. The intent of this requirement is to address the frequent complaint from Wisconsin consumers alleging that although the enrollee sought care from a participating surgeon at a participating hospital, the ancillary providers including anesthesiology or other specialist was nonparticipating and as a result the enrollee incurred large, unexpected medical bills. It is expected that with additional information in advance of the needed service, enrollees will be able to work with insurers and providers to make the best informed medical and financial decisions.
Preferred provider plans are not required to have a quality assurance program and are instead subject to remedial action plans as mentioned earlier. The remedial action plan requires the insurer offering the preferred provider plan to develop procedures for taking effective and timely remedial actions to address issues arising from access to and continuity of care. The proposed rule requires the remedial action plan to contain at least all of the following: designation of a senior-level staff person responsible for oversight of the plan, a written plan for the oversight of any function that is delegated to other contracted entities, a procedure for periodic review of the insurer's performance or the performance of a contracted entity, periodic and regular review of grievances, complaints and OCI complaints, a written plan for maintaining the confidentiality of protected information, documentation of timely correction of access to and continuity of care issues identified in the plan to include the date the insurer was aware of the issue, the type of issue, the person responsible for the development and management of the plan, the remedial action plan utilized in each situation, the outcome of the action plan, and the established time frame for reevaluation of the issue to ensure resolution and compliance with the remedial action plan
Emergency medical care treatment coverage was identified by the Commissioner as another specific type of service for which the Office frequently receives complaints from Wisconsin consumers. This form of regulation is found in the surrounding states and is most similar to the regulation in Iowa. To further clarify the prudent person mandate for coverage of emergency medical care, the proposed rule contains requirements for both insurers offering defined network plans and preferred provider plans that provide emergency medical care treatment as a covered benefit. These insurers shall provide that treatment as though the provider was a participating provider when the enrollee cannot reasonably reach a preferred provider or is admitted for inpatient care even if the care is provided by a nonparticipating provider. The plans must reimburse the provider at the nonparticipating provider rate and apply any deductibles, coinsurance or other costsharing provisions, if applicable, at the participating provider rate.
Defined network plans and preferred provider plans are both required to annually certify compliance with applicable access standards. Defined network plans and preferred providers plans must both provide covered benefits by plan providers with reasonable promptness with respect to geographic location, hours of operation waiting times for appointments in provider offices and after hour's care reflecting the usual practice in the local area with geographic availability reflecting the usual medical travel times within the community. This requirement is not new and does not require insurers to mandate to participating providers the provider's hours of operation. Rather when the insurer is required to reply to the Office, the insurer must demonstrate that the hours of operation waiting time for appointments and after hours care of the participating providers is reasonable based upon the geographic location and usual medical travel times within that community.
The Commissioner finds that the circumstances of insurers offering group or blanket health insurance policy require that the insurer offering the policy otherwise exempt from Chs. 600
, Stats., under s. 600.01 (1) (b) 3.
, Stats., in order to provide adequate protection to Wisconsin enrollees and the public those insurers shall comply with s. Ins 9.34 (2)
and s. 609.22 (2)
, Stats., when it covers 100 or more residents of this state under a policy that is otherwise exempt under s. 600.01 (1) (b) 3.
Finally, the proposed rule includes several new definitions of terms that were requested by the industry to assist in clarifying relationships between insurers and providers and to clarify what entities are subject to specific requirements.
The proposed rule would be enforced under ss. 601.41
, Stats., or ch. 645
, Stats., or any other enforcement provision of chs. 600
, Stats. This proposed rule includes a significantly delayed applicability date to give insurers amply time to comply with the various provisions including sufficient time to submit to the OCI forms for approval prior to use.
6. Summary of and preliminary comparison with any existing or proposed federal regulation that is intended to address the activities to be regulated by the proposed rule:
There is no existing or proposed federal regulation that is intended to address the issues presented within the proposed rule. There is federal regulation for issuers of Medicare Advantage, a means of delivering Medicare Part A and B benefits through preferred provider organizations, formally known as Medicare + Choice. States are preempted from regulating issuers of Medicare Advantage, however the Centers for Medicare & Medicaid did provide regulations that included access requirements which are similar to the requirements incorporated in the OCI proposed rule
7. Comparison of similar rules in adjacent states as found by OCI:
Iowa: Iowa statute §514C.16, requires a carrier which provides coverage for emergency services to be responsible for charges for emergency services furnished outside any contractual provider network or preferred provider network for covered individuals. Iowa Administrative Code s. 191-27.4 (1)(a), requires a health benefit plan which provides for incentives for covered persons to use the health care services of a preferred provider to contain a provision that if a covered person receives emergency services specified in the preferred provider arrangement and cannot reasonably reach a preferred provider, emergency services rendered during the course of the emergency will be reimbursed as though the covered person had been treated by a preferred provider, subject to any restrictions which may govern payment by a preferred provider for emergency services. Iowa statute §514B and Administrative Code 191-40.21, require HMOs to reimburse a provider of emergency services after a review of the care and may not deny reimbursement solely on the grounds that the services were provided by non-contracted providers.
Iowa statute §514F.3 requires the commissioner of insurance to adopt rules for preferred provider contracts and organizations and to adopt rules related to preferred provider arrangements. Iowa statute §514K.1 requires HMOs, organized delivery systems or an insurer using a preferred provider arrangement to provide to its enrollees written information that at a minimum must include the following; a description of the plan's benefits and exclusions, enrollee cost-sharing requirements, list of participating providers, disclosure of drug formularies, explanation for accessing emergency care services, policy for addressing investigational or experimental treatments, methodologies used to compensate providers, performance measures as determined by the commissioner and information on how to access internal and external grievance procedures. In addition the Iowa department must annually publish a consumer guide providing a comparison by plan on performance measures, network composition, and other key information to enable consumers to better understand plan differences.
Iowa Administrative Code 191-27.3 (1), requires preferred provider arrangements to establish the amount and manner of payment to a preferred provider, the mechanisms designed to minimize cost of the health benefits plan and ensure reasonable access to covered services under the preferred provider arrangement. Iowa Administrative Code 191-27.4 (1) (b), requires preferred provider plans to contain a provision that clearly identifies the differentials in benefit levels for health care services of preferred providers and non-preferred providers. Iowa Administrative Code 191-27.4 (2), requires that if a health benefit plan provides difference in benefit levels payable to preferred providers compared to other providers, such difference shall not unfairly deny payment for covered services and shall be no greater than necessary to provide a reasonable incentive for covered persons to use the preferred provider.
Illinois: Illinois statutory code 215 ILCS 5/370o, requires any preferred provider contract to provide the enrollee emergency care coverage regardless of whether the emergency care is provided by a preferred or non-preferred provider and the coverage shall be at the same benefit level as if the service or treatment had been rendered by a plan provider. Section 215 ILCS 5/370i, sec. (a) prohibits policies from containing provisions that would unreasonably restrict the access and availability of health care services for the enrollee. Section 215 ILCS 134/40, sec. 40 (d) requires health care plan to pay for services of a specialist with the enrollee only responsible for the services as though the services were provided by an in-network provider when the plan does not have the specialist that the enrollee needs for the care of an on-going specific condition. The primary care physician arranges for the enrollee to see a specialist that is within a reasonable distance and travel time and the primary provider notifies the plan of the referral.
The information required to be provided to consumers are contained in s. 215 ILCS 134/15, that requires annual reporting of participating health care providers in the plan's service area and in addition to basic terms of the plan, includes disclosure of out-of-area coverage, if any, financial responsibility of enrollees including co-payments, deductibles, premium and any other out-of-pocket expenses, continuity of care, appeal rights and mandated benefits. Illinois Administrative Code s. 5420.40, requires disclosure so that a person can compare the attributes of various health care plans based upon a description of coverage. This disclosure includes that 2 appendices are completed that detail specific copayments, deductibles, and other cost-sharing provisions for services that must be included with the policy for consumer information.
In addition to the worksheets that provide consumers with detailed information, Illinois statutory code s. 215ILCS 5/356z.2, also requires an insurer that issues or renews a individual or group accident and health policy and arranges, contracts with or administers contracts with providers whereby the beneficiary are provided an incentive to use the services of such provider must include the following disclosure of limited benefits in its contracts and evidence of coverage:
WARNING, LIMITED BENEFITS WILL BE PAID WHEN NON-PARTICIPATING PROVIDERS ARE USED. You should be aware that when you elect to utilize the services of a non-participating provider for a covered service in non-emergency situations, benefit payments to such non-participating provider are not based upon the amount billed. The basis of your benefit payment will be determined according to your policy's fee schedule, usual and customary charge (which is determined by comparing charges for similar services adjusted to the geographical are where the services are performed), or other method as defined by the policy. YOU CAN EXPECT TO PAY MORE THAN THE COINSURANCE AMOUNT DEFINED IN THE POLICY AFTER THE PLAN HAS PAID ITS REQUIRED PORTION. Non-participating providers may bill members for any amount up to the billed charge after the plan has paid its portion of the bill. Participating providers have agreed to accept discounted payment for services with no additional billing to the member other than co-insurance and deductible amounts. You may obtain further information about the participating status of professional providers and information on out-of-pocket expenses by calling the toll free telephone number on your identification card. (Emphasis in original.)
Illinois statute s. 215 ILCS 134/80 requires health care plans have procedures for quality assessment program including in s. (3) and (4) that require plans have a procedure for remedial action to correct quality problems that have been verified in accordance with the written plan's methodology and criteria, including written procedures for taking appropriate corrective action and follow-up measures implemented to evaluate the effectiveness of the action plan.
Illinois Administrative Code s. 5420.50 requires that all provider agreements contain provisions providing for advance notice from providers when terminating from the plan and requirements that the plan notify affected enrollees on a timely basis. The notice provided to the enrollee must contain information on how enrollees are to select a new health care provider.
Minnesota: Minnesota statute s. 62A.049, prohibits an accident and sickness policy from requiring prior authorization in cases of emergency confinement or emergency treatment. The enrollee or authorized representative must notify the insurer as soon as reasonably possible. Section 62Q.55 requires managed care organizations including preferred provider organization, to provide enrollees with available and accessible emergency services. Services shall be covered whether provided by participating or nonparticipating providers and whether provided within or outside the health plan's service area. Section 62D.20 and s. 4685.0700, Minnesota Administrative Code, require HMOs to provide out-of-area services including for emergency care.
Minnesota statute s. 62Q.49 (subd. 2) (a), requires all health plans to clearly specify how the cost of health care used to calculate any co-payments, coinsurance or lifetime benefits will be affected by the contracting in which health care providers agree to accept discounted charges. Section 62Q.49, further any marketing or summary materials must prominently disclose and clearly explain the provisions relating to co-payments, coinsurance or maximum lifetime benefits.
Minnesota statute s. 62Q.58, requires that if an enrollee receives services from a nonparticipating specialist because a participating specialist is not available, the services must be provided at no additional cost to the enrollee beyond what the enrollee would otherwise pay for services received from a participating specialist.
Minnesota statute s. 62Q.746, permits the department to request and the health plan to provide the following information including how the plan determines who are eligible to participating in the network, the number of full-time equivalent physicians, by specialty, non-physician providers and allied health providers used to provide services and summary data that is broken down by type of provider reflecting actual utilization of network and non-network practitioners and allied professionals by enrollees of the plan.
Michigan: Michigan statute s. 500.3406
k, requires an expense-incurred hospital, medical or surgical policy that provides coverage for emergency health services, including an HMO plan, shall provide coverage for medically necessary services provide to an enrollee for the sudden onset of a medical condition that manifests itself by signs and symptoms of sufficient severity, that the absence of immediate care could reasonably be expected to result in serious jeopardy to health without prior authorization.
Insurers that contract with providers are governed by the Prudent Purchaser Act of 1984 including preferred provider organization (MCL 550.50 et seq.). The organization that contracts with providers shall annually report to the commissioner basic utilization of the providers (MCL 550.56). Under MCL 550.53, organizations that contract with providers to control costs and utilization may limit the number of providers to the number necessary to assure reasonable levels of access to health care services, located within reasonable distance.
8. A summary of the factual data and analytical methodologies that OCI used in support of the proposed rule and how any related findings support the regulatory approach chosen for the proposed rule:
The rule as drafted by OCI is intended to ensure enrollee access to health care services, ensure continuity of health care and ensure that enrollees fully understand the products offered including deductibles, co-payment and other cost-sharing measures that when combined with premium payments will permit the enrollee to make better product selection and provider choices. The proposed rule achieves these goals while recognizing the differences between preferred provider plans and defined network plans. In addition to the statutory amendments necessitating the rule, the OCI identified several key consumer and regulatory issues through a review of complaints filed with the agency involving insurers offering preferred provider plans (PPOs) that the proposed rule addresses through required disclosures to enrollees, disclosure to the OCI, coverage of emergency services and adequate access to participating providers.
The complaint review involved complaints filed for the period January 1, 2003 through May 31, 2004. The OCI reviewed only complaints identified in the agency data system as group health coverage. The OCI identified 936 PPO complaints. These complaints involved claim administration (83%), marketing (2%), underwriting (9%), policyholder service (5%) and “other" complaints (1%).
The OCI found that 33 complaints involved ancillary providers. These complaints involve PPO plans that have participating provider contracts with hospitals but do not have contracts with the anesthesiologists, radiologists, pathologists and emergency medicine physicians associated with in-network hospitals. Enrollees either were not aware that the ancillary providers were non-participating providers or did not have an option but to use the non-participating providers due to location or medical necessity. The result to these enrollees was significant out-of-pocket expenses as some PPOs have 30% or more differential between participating and non-participating providers and may also have higher co-payments or other cost-sharing provisions when services are performed by non-participating providers.
During this same period of time, the OCI identified 15 complaints involving emergency services that were subject to non-participating deductibles and co-payments. Although some insurers waive the deductible and co-payments billed by nonparticipating providers for rendering emergency care services, many insurers leave enrollees financially responsible for significant, unexpected, medical expenses.
The OCI also identified 19 complaints that involved changes in the provider networks, 2 complaints involving limits in the available participating network, 18 involving the enrollee's lack of understanding of PPO plan requirements with 71 complaints grouped under the heading of “other" which includes UCR determinations, and pre-certification or pre-authorization issues.
In addition the complaint review, the OCI in a cooperative effort of the Commissioner met with representatives from the insurance industry. Since November 2004, four public working meetings have been held to discuss each section of the proposed rule. Each public meeting was attended by the Commissioner and his staff and representatives from the Wisconsin Association of Life and Health Insurer, Council for Affordable Healthcare and Wisconsin Association of Provider Networks as well as representatives from no less than seven (7) domestic and non-domestic health insurers. Additional work groups comprised of representative from industry and the Office met two additional times to work on the ancillary provider language and criteria for preferred provider plans. Participants in the open meetings were invited to comment and make recommendations or specific modifications to the proposed rule. Candid discussion provided both Commissioner and the industry opportunity to voice support or concerns over each section of the rule. The public working meetings also gave both industry and the Commissioner the opportunity to share its respective views of the marketplace. Discussion often focused on how proposed and revised language affects the industry and its ability to function in the marketplace with the guiding statutory requirements and consumer concerns as reflected in complaints received by the OCI to maintain the proper balance in the proposed regulations. At each meeting revisions that had previously been discussed were reviewed, comment invited with extensive dialogue from both industry and OCI. At the end of the last working public meeting held May 9, 2005, the Commissioner invited written comment on the entire proposed rule. The comment period was intended to provide industry with time to reflect on the proposed rule and offer specific thoughtful revisions or recommendations and then permit the Commissioner time to review the suggested revisions and recommendations prior to issuing the Notice of Hearing for the rule. The culmination of those meeting, including written comments received throughout the last year, is reflected in this proposed rule.
9. Any analysis and supporting documentation that OCI used in support of OCI's determination of the rule's effect on small businesses under s. 227.114
This rule may have an effect on only one (1) regulated small business as defined in s. 227.114 (1)
, Wis. Stats., that is an LSHO and authorized to only write 10% of its premium as a preferred provider plan. OCI maintains a database of all licensed insurers in Wisconsin. Included with the information required to be submitted to OCI, the database includes information submitted by the companies related to premium revenue and employment. In an examination of this database, OCI identified only one insurer with annual premium volume of less than $5 million that would be affected by this proposed rule.