Fiscal Estimate & Economic Impact Analysis
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1. Type of Estimate and Analysis
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X Original Updated
Corrected
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2. Administrative Rule Chapter, Title and Number
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Agency 145 Sections Ins 17.01 and 17.28 (6)
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3. Subject
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Injured Patients and Families Compensation Fund Annual Fund fees and Mediation Panel Fees for fiscal year 2013.
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4. Fund Sources Affected
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5. Chapter 20, Stats. Appropriations Affected
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GPR FED PRO
PRS X SEG SEG-S
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None
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6. Fiscal Effect of Implementing the Rule
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X No Fiscal Effect
Indeterminate
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Increase Existing Revenues
Decrease Existing Revenues
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Increase Costs
Could Absorb Within Agency's Budget
Decrease Cost
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7. The Rule Will Impact the Following (Check All That Apply)
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State's Economy
Local Government Units
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X Specific Businesses/Sectors
Public Utility Rate Payers
X Small Businesses (if checked, complete Attachment A)
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8. Would Implementation and Compliance Costs Be Greater Than $20 million?
Yes
X No
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9. Policy Problem Addressed by the Rule
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To establish the annual fees that participating health care providers must pay to the Injured Patients and Families Compensation Fund (“Fund") as required by s. 655.27 (3), Wis. Stats., for fiscal year beginning July 1, 2012. The proposed rule will also establish the mediation panel fees for fiscal year 2013 commencing on July 1, 2012. This rule provides the Fund with appropriate and adequate funding and solvency for future years. This is the main vehicle for achieving and maintaining the Fund's solvency.
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10. Summary of the businesses, business sectors, associations representing business, local governmental units, and individuals that may be affected by the proposed rule that were contacted for comments.
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OCI solicited comments generally through publication requesting comments from the public utilizing the OCI website. Additionally OCI solicited comments from businesses, individuals, and local government units related to the implementation and compliance costs. Solicitations were sent to health insurance members of OCI's Health and Life Insurance Advisory Council and interested parties. Members included health insurance companies, health insurance agent representatives, consumer representatives, provider representatives and representatives of small business. Additional solicitations were made to associations representing various affected parties and local government representatives including:
• Wisconsin Association of Health Plans
• Wisconsin Association of Health Underwriters
• Independent Agents of Wisconsin
• National Federation of Independent Business-Wisconsin
• America's Health Insurance Plans
• Wisconsin Manufacturers and Commerce
• Wisconsin Dental Association
• Wisconsin Medical Society
• Professional Insurance Agents of Wisconsin
• National Association of Insurance and Financial Advisors-Wisconsin
• Wisconsin Hospital Association
• The League of Wisconsin Municipalities
• Wisconsin Counties Association
• Wisconsin Towns Association
• Wisconsin Association of School Boards
• Wisconsin Association of School District Administrators
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11. Identify the local governmental units that participated in the development of this EIA.
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None beyond solitiation for comments.
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12. Summary of Rule's Economic and Fiscal Impact on Specific Businesses, Business Sectors, Public Utility Rate Payers, Local Governmental Units and the State's Economy as a Whole (Include Implementation and Compliance Costs Expected to be Incurred)
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All health care provider participants in the Fund as set forth in s. 655.002 (1), Wis. Stat., will be required to pay an additional 5% assessment for their medical malpractice coverage under Ch.655, Wis. Stat. The impact is considered to be minimal in that the majority of the Fund's participants are physicians, the majority of which are assessed fees in Class 1 and 2. The change in fund fees will result in an increase of $73 and $131, respectively, in Fund fees for fiscal year 2013.
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13. Benefits of Implementing the Rule and Alternative(s) to Implementing the Rule
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The proposed rule will benefit Fund participants by ensuring that fee revenue is adequate to cover anticipated administrative, operating and claims payments costs. The alternatives to this rule would be to establish a Fund fee increase that is higher or lower than the proposed 5%, to maintain current fee amounts or to lower Fund fees. A lower proposed increase, a static fee level, or a lowered fee would leave the Fund with inadequate funding to cover actuarially-based projected costs, while a higher fee increase would present an unnecessary cost to Fund participants.
The proposed rule does not significantly impact Wisconsin's economy, productivity, jobs or the overall economic competitiveness of Wisconsin. Wisconsin's health care marketplace is strengthened with an affordable layer of medical malpractice coverage. The Fund has existed in Wisconsin since 1975. Fund participants will benefit from a stable and solvent fund. Additionally, Fund participants should not experience increased compliance costs.
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14. Long Range Implications of Implementing the Rule
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The long-range implication of the rule as proposed will be an adequately funded and solvent Fund.
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15. Compare With Approaches Being Used by Federal Government
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Federal government does not address this subject matter.
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16. Compare With Approaches Being Used by Neighboring States (Illinois, Iowa, Michigan and Minnesota)
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None of the neighboring states have a patient compensation fund or a general program of state-sponsored liability insurance for physicians.
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17. Contact Name
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18. Contact Phone Number
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Louie Cornelius
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608-264-8113
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ATTACHMENT A
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1. Summary of Rule's Economic and Fiscal Impact on Small Businesses (Separately for each Small Business Sector, Include Implementation and Compliance Costs Expected to be Incurred)
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The agency does not anticipate any implementation costs or additional compliance costs for fund participants. All health care provider participants in the Fund as set forth in s. 655.002 (1), Wis. Stat., will be required to pay an additional 5% assessment for their medical malpractice coverage under Ch. 655, Wis. Stat. The impact is considered to be minimal in that the majority of the Fund's participants are physicians, the majority of which are assessed fees in Class 1 and 2. The change in fees will result in an increase of $73 and $131, respectively, in Fund fees for fiscal year 2013.
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2. Summary of the data sources used to measure the Rule's impact on Small Businesses
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The Fund contracts for actuarial services to develop the documentation and analysis necessary for the Actuarial and Underwriting Committee of the Fund. The data includes the change, if any is proposed, at the physician level. Since many physicians are small employer practices this information does relay information to the Committee and Board for the impact on small businesses directly impacted by the proposal. The actuarial firm presents its analysis to the Actuarial and Underwriting Committee of the Fund Board of Governors. The Committee reviews all data and projections and makes a recommendation to the full Board of Governors for consideration. The Fund Board of Governors reviewed the Committee's recommendation at its December 14, 2011 meeting as well as the underlying analysis by the actuarial firm. Following deliberation, the Board of Governors affirmed the Committee's recommendation of an increase of 5% for Fund fees and affirmed the change to the mediation panel fees of a decrease per physician of $2.50 and $0.50 per hospital bed.
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3. Did the agency consider the following methods to reduce the impact of the Rule on Small Businesses?
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Less Stringent Compliance or Reporting Requirements
Less Stringent Schedules or Deadlines for Compliance or Reporting
Consolidation or Simplification of Reporting Requirements
Establishment of performance standards in lieu of Design or Operational Standards
Exemption of Small Businesses from some or all requirements
X Other, describe:
The Board of Governors discussed a lower or neutral increase in Fund fees but determined that such action would inadequately fund the Fund for claims incurred during fiscal year 2013 and shift the burden of funding to future years and providers.
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4. Describe the methods incorporated into the Rule that will reduce its impact on Small Businesses
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The proposed increase is below breakeven financing for the Fund but sufficient to cover anticipated claims, administrative and operating expenses.
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5. Describe the Rule's Enforcement Provisions
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This rule proposes fees. Failure to pay Fund fees is governed by s. Ins 17.01, Wis. Adm. Code, which requires the Fund to notify the medical examining board of each physician who has not paid the fee and notify the Department of Health Services of each hospital that has not paid the fee as required.
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6. Did the Agency prepare a Cost Benefit Analysis (if Yes, attach to form)
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Yes X No
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