Madison WI 53702
Private Sector Fiscal Analysis
Rule Ins 17.25 (12m) and 17.28 (6s) peer review surcharge rates relating to annual injured patients and families compensation fund fees and Wisconsin health care liability insurance plan premium rates.
The changes in the surcharge rates promulgated by this rule do not result in a significant fiscal effect on the private sector. The cost of fund coverage is a very small portion of the expenses incurred by health care providers. The plan insures a relatively small number of health care provider, approximately 300, and therefore the potential for any significant impact is very minimal.
These surcharge rates have not been revised since the implementation of the peer review surcharge in 1980. Although a health care provider may pass any increase resulting from a surcharge on to its patients, there will not be a significant fiscal effect on the private sector as a result of this proposed rule.
Fiscal Estimate
The Injured Patients and Families Compensation Fund (IPFCF or Fund) is a segregated fund. Annual Fund fees are established to become effective each July 1 based on actuarial estimates of the Fund's needs for payment of medical malpractice claims. Health care providers may have a surcharge levied on their fund fees based upon claims experience, pursuant to a recommendation by the Fund's Peer Review Council. The proposed revisions to the surcharge tables were approved by the Fund's Board of Governors at its December 14, 2005 meeting.
The Fund is a unique fund; there are no other funds like it in the country. The WI Fund provides unlimited liability coverage and participation is mandatory. These two features make this Fund unique compared to funds in other states. The only persons who will be affected by this rule change are the Fund participants themselves as the IPFCF is fully funded through assessments paid by Fund participants.
The Wisconsin Health Care Liability Insurance Plan was created by statute and is a licensed insurance company. The insurance operations are funded by premiums paid by insured health care providers.
There is no effect on GPR.
Initial Regulatory Flexibility Analysis
Notice is hereby further given that pursuant to s.
227.114, Stats., the proposed rule may have an effect on small businesses. The initial regulatory flexibility analysis is as follows:
a. Types of small businesses affected: Insurance agents, LSHO, Town Mutuals, Small Insurers, etc.
b. Description of reporting and bookkeeping procedures required: None beyond those currently required.
c. Description of professional skills required: None beyond those currently required.
OCI Small Business Regulatory Coordinator
The OCI small business coordinator is Eileen Mallow and may be reached at phone number (608) 266- 7843 or at email address
Eileen.Mallow@oci.state.wi.us
Contact Person
A copy of the full text of the proposed rule changes, analysis and fiscal estimate may be obtained from the OCI internet WEB site at
http://oci.wi.gov/ocirules.htm
or by contacting
Inger Williams, Services Section, OCI
(608) 264-8110
125 South Webster Street – 2nd Floor
Madison WI
or PO Box 7873, Madison WI 53707-7873.
Notice of Hearing
Insurance
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 section
Ins 17.01 (3) and
17.28 (6), Wis. Adm. Code, relating to Fiscal year 2008 Fund fees.
Hearing Information
Date: February 19, 2007
Time: 10:30 a.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 can be mailed to:
Theresa Wedekind
OCI Rule Comment for Rule Ins 1728
Office of the Commissioner of Insurance
PO Box 7873
Madison WI 53707-7873
Written comments can be hand delivered to:
Theresa Wedekind
OCI Rule Comment for Rule Ins 1728
Office of the Commissioner of Insurance
125 South Webster St – 2nd Floor
Madison WI 53702
Comments can be emailed to:
Theresa Wedekind
The deadline for submitting comments is 4:00 p.m. on the 8th day after the date for the hearing stated in this Notice of Hearing.
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, with the approval of the board of governors (board) of the injured patients and families compensation fund (fund), is required to establish by administrative rule the annual fees which participating health care providers must pay to the fund and the annual fee due for the operation of the medical mediation panel.
4. Related Statutes or rules:
None.
5. The plain language analysis and summary of the proposed rule:
This rule establishes the fees which participating health care providers must pay to the fund for the fiscal year beginning July 1, 2007. These fees represent a 5 % increase compared with fees paid for the 2006-07 fiscal year. The board approved these fees at its meeting on December 20, 2006, based on the recommendation of the board's actuarial and underwriting committee and reports of the fund's actuaries.
The board is also required to promulgate by rule the annual fees for the operation of the injured patients and families compensation mediation system, based on the recommendation of the director of state courts. The recommendation of the director of state courts was reviewed by the board's actuarial and underwriting committee which recommended to the board an amount slightly less than what was requested based in part upon the ending balance in the mediation system projected financials. This rule implements the funding level approved by the board by establishing mediation panel fees for the next fiscal year at $17.00 for physicians and $1.00 per occupied bed for hospitals, representing a decrease of $8.00 per physician and $1.00 per occupied bed for hospitals from 2006-07 fiscal year mediation panel fees.
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:
To the fund board's and OCI's knowledge there is no existing or proposed federal regulation that is intended to address patient compensation fund rates, administration or activities.
7. Comparison of similar rules in adjacent states as found by OCI:
To the fund board's and OCI's knowledge there are no similar rules in the adjacent states to compare this rule to as none of these states have a patients compensation fund created by statute where rates are directed to be established yearly by rule as is true in Wisconsin.
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:
None. This rule establishes annual fund fees pursuant to the requirements of the above-noted Wisconsin statutes.
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 increase in fund fees will have an effect on some small businesses in Wisconsin. However, the vast majority of fund participants that meet the definition of a small business are single shareholder corporations owned by a physician. These entities do not pay an additional fee separate from the fund fee physicians pay for their individual fund coverage and, therefore, will not be affected by the proposed rule. The fund identified a few small businesses which meet the definition of small business and that may pay an additional fee separate from the physician fee. These small businesses include some small multi-shareholder corporations that pay an additional fee to the fund based upon the number of shareholder physicians and employed physicians. However, even for these few entities, although there is an effect it is not significant nor should it negatively effect the small business's ability to compete with other providers not subject to potential additional fee.
10. If these changes may have a significant fiscal effect on the private sector, the anticipated costs that will be incurred by private sector in complying with the rule:
The increase in fees promulgated by this rule does not result in a significant fiscal effect on the private sector. The cost of fund coverage is a very small portion of the expenses incurred by health care providers. Fund fees prior to this increase are 26% less then they were 5 years ago and after this increase will still be 23% less then 5 years ago. Although a health care provider may pass this increase on to its patients, there will not be a significant fiscal effect on the private sector as a result of this proposed rule.
11. A description of the Effect on Small Business:
This rule will have little or no effect on small businesses. The increase contained in the proposed rule will require providers to pay an increased assessment which will increase the operational expenses for the providers. However, as stated in response to #10, above, while this proposed rule increases fund fees, the fees that will be assessed are still 26% lower than fees paid 5 years ago and the fee is proportional to all size businesses. As such, small businesses will not be disproportionately affected and the proposed rule will have no effect on the provider's competitive abilities.
12. Agency contact person:
A copy of the full text of the proposed rule changes, analysis and fiscal estimate may be obtained from the WEB sites at:
http://oci.wi.gov/ocirules.htm
or by contacting Inger Williams, OCI Services Section, at:
Phone: (608) 264-8110
Address: 125 South Webster St – 2nd Floor Madison WI 53702
Mail: PO Box 7873, Madison WI 53707-7873
13. Place where comments are to be submitted and deadline for submission:
The deadline for submitting comments is 4:30p.m. on February 27, 2006.
Mailing address:
Theresa Wedekind
OCI Rule Comment for Rule Ins 17288 PCF fee rule
Office of the Commissioner of Insurance
PO Box 7873
Madison WI 53707-7873
