AB75-ASA1,1619,23 22(4) "Permittee" means a care management organization issued a permit under
23this chapter.
AB75-ASA1,1619,25 24648.03 Applicability of other laws. Notwithstanding s. 600.01 (1) (b) 10. a.,
25ss. 600.01, 600.02, 600.03, and 600.12 apply to this chapter.
AB75-ASA1,1620,3
1648.05 Permit. (1) Permit required. After December 31, 2009, no care
2management organization may provide services to its enrollees without a permit
3under this chapter.
AB75-ASA1,1620,5 4(2) Application. A care management organization applying for a permit shall
5submit all of the following information in the format required by the commissioner:
AB75-ASA1,1620,86 (a) The names, addresses and occupations of all controlling persons and
7directors and principal officers of the care management organization currently and
8for the preceding 10 years, unless the commissioner waives this requirement.
AB75-ASA1,1620,109 (b) Business organization documents, including articles and bylaws if
10applicable.
AB75-ASA1,1620,1311 (c) A business plan approved by the department, including a projection of the
12anticipated operating results at the end of each of the next 3 years of operation, based
13on reasonable estimates of income and operating expenses.
AB75-ASA1,1620,1514 (d) Any other relevant documents or information that the commissioner
15reasonably requires after consulting with the department.
AB75-ASA1,1620,18 16(3) Standards for issuing permit. The commissioner may issue a permit to the
17care management organization if the commissioner finds, after consulting with the
18department, all of the following:
AB75-ASA1,1620,1919 (a) All requirements of law have been met.
AB75-ASA1,1620,2320 (b) All the directors and principal officers or any controlling person are
21trustworthy and competent and collectively have the competence and experience to
22engage in the proposed services and are not excluded from participation under 42
23USC 1320a-7
or 42 USC 1320a-7a.
AB75-ASA1,1620,2524 (c) The business plan is consistent with the interests of the care management
25organization's enrollees and the public.
AB75-ASA1,1621,3
1(4) Suspension or revocation. The commissioner may suspend or revoke a
2permit issued under this chapter if the commissioner finds, after consulting with the
3department, any of the following:
AB75-ASA1,1621,54 (a) The permittee violated a law or rule, including a rule establishing standards
5for the financial condition of care management organizations.
AB75-ASA1,1621,66 (b) The permittee is in a financially hazardous condition.
AB75-ASA1,1621,87 (c) The permittee is controlled or managed by persons who are incompetent or
8untrustworthy.
AB75-ASA1,1621,99 (d) The permittee conceals records from the commissioner.
AB75-ASA1,1621,1010 (e) The permittee's business plan is not in the public interest or is not prudent.
AB75-ASA1,1621,1211 (f) The permittee ceases to be certified by or maintain a contract with the
12department.
AB75-ASA1,1621,14 13648.10 Powers and duties of the commissioner. The commissioner may
14do any of the following:
AB75-ASA1,1621,17 15(1) Promulgate rules that are necessary to carry out the intent of this chapter,
16including, after consulting with the department, standards for the financial
17condition of care management organizations.
AB75-ASA1,1621,21 18(2) Use the authority granted under ss. 601.41, 601.42, 601.43, 601.44, 601.61,
19601.62, 601.63, and 601.64, including the authority to issue orders, to enforce this
20chapter and to ensure that a care management organization has sufficient financial
21resources.
AB75-ASA1,1621,23 22648.15 Reports and replies. (1) Reports. The commissioner may require
23from any care management organization any of the following:
AB75-ASA1,1622,3
1(a) Statements, reports, answers to questionnaires, and other information in
2whatever reasonable form the commissioner designates and at such reasonable
3intervals as the commissioner chooses, or from time to time.
AB75-ASA1,1622,54 (b) Full explanation of the programming of any data storage or communication
5system in use.
AB75-ASA1,1622,86 (c) Information from any books, records, electronic data processing systems,
7computers, or any other information storage system at any reasonable time in any
8reasonable manner.
AB75-ASA1,1622,109 (d) Statements, reports, audits, or certification from a certified public
10accountant or an actuary approved by the commissioner.
AB75-ASA1,1622,13 11(2) Forms. The commissioner, after consulting with the department, may
12prescribe forms for the reports under sub. (1) and specify who shall execute or certify
13such reports.
AB75-ASA1,1622,17 14(3) Accounting methods. The commissioner, after consulting with the
15department, may prescribe reasonable minimum standards and techniques of
16accounting and data handling to ensure that timely and reliable information will
17exist and will be available to the commissioner.
AB75-ASA1,1622,23 18(4) Replies. Any officer or manager of a care management organization, any
19person controlling or having a contract under which the person has a right to control
20a care management organization, whether exclusively or otherwise, or any person
21with executive authority over or in charge of any segment of such a care management
22organization's affairs, shall reply promptly in writing or in another designated form,
23to any written inquiry from the commissioner requesting a reply.
AB75-ASA1,1622,25 24(5) Verification. The commissioner may require that any communication
25made to the commissioner under this section be verified.
AB75-ASA1,1623,3
1(6) Immunity. In the absence of actual malice, no person shall be subject to
2damages in an action for defamation based on a communication to the commissioner
3required by law under this chapter or by the commissioner under this chapter.
AB75-ASA1,1623,10 4(7) Experts. The commissioner may employ experts to assist the commissioner
5in an examination or in the review of any transaction subject to approval under this
6chapter. The care management organization that is the subject of the examination,
7or that is a party to a transaction under review, including the person acquiring,
8controlling, or attempting to acquire the care management organization, shall pay
9the reasonable costs incurred by the commissioner for the expert and related
10expenses.
AB75-ASA1,1623,13 11648.20 Examinations. (1) Power to examine. (a) To inform himself or herself
12about a matter related to the enforcement of this chapter, the commissioner may
13examine the affairs and condition of any permittee.
AB75-ASA1,1623,1614 (b) So far as reasonably necessary for an examination under par. (a), the
15commissioner may examine the accounts, records, or documents so far as they relate
16to the permittee, of any of the following:
AB75-ASA1,1623,1817 1. An officer, manager, employee, or person who has executive authority over
18or is in charge of any segment of the permittee's affairs.
AB75-ASA1,1623,2019 2. A person controlling or having a contract under which the person has the
20right to control the permittee whether exclusively or with others.
AB75-ASA1,1623,2321 3. A person who is under the control of the permittee, or a person who is under
22the control of a person who controls or has a right to control the permittee whether
23exclusively or with others.
AB75-ASA1,1624,3
1(c) On demand, every permittee shall make available to the commissioner for
2examination any of its own accounts, records, documents, or evidences of
3transactions.
AB75-ASA1,1624,54 (d) On order of the commissioner any examinee under this chapter shall bring
5to the office for examination such records as the order reasonably requires.
AB75-ASA1,1624,12 6(2) Audits or actuarial or other evaluations. In lieu of all or part of an
7examination under sub. (1), or in addition to it, the commissioner may order an
8independent audit by certified public accountants or an actuarial or other evaluation
9by actuaries or other experts approved by the commissioner of any permittee. Any
10accountant, actuary, or other expert selected is subject to rules respecting conflicts
11of interest promulgated by the commissioner. Any audit or evaluation under this
12section is subject to s. 648.25, so far as applicable.
AB75-ASA1,1624,18 13(3) Alternatives to examination. In lieu of all or part of an examination under
14this section, the commissioner may accept the report of an audit already made by
15certified public accountants or of an actuarial or other evaluation already made by
16actuaries or other experts approved by the commissioner, or the report of an
17examination made by another government agency in this state, the federal
18government, or another state.
AB75-ASA1,1625,2 19(4) Purpose and scope of examination. An examination may but need not cover
20comprehensively all aspects of the permittee's affairs and condition. The
21commissioner shall determine the exact nature and scope of each examination, and
22in doing so shall take into account all relevant factors, including the length of time
23the permittee has been doing business, the length of time the permittee has been
24certified by the department, the nature of the business being examined, the nature

1of the accounting records available, and the nature of examinations performed
2elsewhere.
AB75-ASA1,1625,6 3648.25 Conducting examinations. (1) Order of examination. For each
4examination under s. 648.20, the commissioner shall issue an order stating the scope
5of the examination and designating the examiner in charge. Upon demand, a copy
6of the order shall be provided to the examinee.
AB75-ASA1,1625,9 7(2) Access to examinee. Any examiner authorized by the commissioner shall,
8for the purposes of the examination, have access at all reasonable hours to the
9premises and to any property of the examinee.
AB75-ASA1,1625,13 10(3) Cooperation. The officers, employees, and agents of the examinee shall
11comply with every reasonable request of the examiners for assistance in any matter
12relating to the examination. No person may obstruct or interfere with the
13examination in any way other than by legal process.
AB75-ASA1,1625,17 14(4) Correction of books. If the commissioner finds the accounts or records to
15be inadequate for proper examination of the condition and affairs of the permittee
16or improperly kept or posted, the commissioner may employ experts to rewrite, post,
17or balance them at the expense of the permittee.
AB75-ASA1,1625,23 18(5) Report on examination. The examiner in charge of an examination shall
19make a proposed report of the examination, including information and analysis
20ordered in sub. (1), together with the examiner's recommendations. Preparation of
21the proposed report may include conferences with the examinee or the examinee's
22representatives at the option of the examiner in charge. The commissioner shall
23serve the final examination report on the examinee.
AB75-ASA1,1625,25 24(6) Copies for board. The permittee shall furnish copies of the final
25examination report to each member of its board or governing body.
AB75-ASA1,1626,7
1(7) Report as evidence. In any proceeding by or against the permittee or any
2officer or agent of the permittee the final examination report shall be admissible as
3evidence of the facts stated in the report. In any proceeding commenced under this
4chapter, the final examination report shall be admissible as evidence of the facts
5stated in the report. In any proceeding by or against the examinee, the facts asserted
6in any final examination report properly admitted in evidence shall be presumed to
7be true in the absence of contrary evidence.
AB75-ASA1,1626,13 8648.27 Costs. (1) Costs to be paid by care management organizations.
9Permittees shall pay the reasonable estimate of costs of examinations under s.
10648.20, of review of applications under s. 648.05, and of analysis and financial
11monitoring of care management organizations by the commissioner and the
12department, including overhead and fixed costs, by a system of regular annual
13billings.
AB75-ASA1,1626,19 14(2) Determination of costs. Annually, the commissioner shall determine the
15estimated costs under sub. (1) for the commissioner and the department. The
16commissioner shall serve a request for payment on each permittee allocating the cost
17to each permittee in an amount that the commissioner determines reflects the
18permittee's proportionate share of projected enrollment in the department's annual
19contracting period.
AB75-ASA1,1626,21 20(3) Payment deadline. The permittee shall pay the amount determined by the
21commissioner within 30 days of service of the request for payment under sub. (2).
AB75-ASA1,1626,24 22648.30 Nondisclosure of information. (1) Types of information. The office
23may refuse to disclose and may prevent any other person from disclosing any of the
24following:
AB75-ASA1,1627,2
1(a) Testimony, reports, records, and information that are obtained, produced,
2or created in the course of an inquiry under s. 648.15.
AB75-ASA1,1627,43 (b) Testimony, reports, records, and information that are obtained, produced,
4or created in the course of an examination under s. 648.20.
AB75-ASA1,1627,85 (c) Testimony, reports, records, communications, and information that are
6obtained by the office from, or provided by the office to, any of the following, under
7a pledge of confidentiality or for the purpose of assisting or participating in
8monitoring activities or in the conduct of any inquiry, investigation, or examination:
AB75-ASA1,1627,99 1. The National Association of Insurance Commissioners.
AB75-ASA1,1627,1110 2. An agent or employee of the National Association of Insurance
11Commissioners.
AB75-ASA1,1627,1212 3. The insurance commissioner of another state.
AB75-ASA1,1627,1313 4. An agent or employee of the insurance commissioner of another state.
AB75-ASA1,1627,1514 5. An international, federal, state, or local regulatory or law enforcement
15agency, including the department.
AB75-ASA1,1627,1616 6. An agent or employee of an agency described in subd. 5.
AB75-ASA1,1627,18 17(2) Waiver and applicability of the privilege. Section 601.465 (2m) (a) to (d)
18applies to the privilege under sub. (1).
AB75-ASA1,1627,24 19648.35 Enforcement procedure. (1) Injunctions and restraining orders.
20The commissioner may commence an action in circuit court in the name of the state
21to restrain by temporary or permanent injunction or by temporary restraining order
22any violation of this chapter, any rule promulgated under this chapter, or any order
23issued under s. 648.10 (2). The commissioner need not show irreparable harm or lack
24of an adequate remedy at law in an action commenced under this subsection.
AB75-ASA1,1628,3
1(2) Orders. The commissioner shall issue any orders under the procedures
2described in s. 601.63 and shall hold any hearings under the procedures described
3in s. 601.62.
AB75-ASA1,1628,19 4(3) Compulsive forfeitures. If a person does not comply with an order issued
5under s. 648.10 (2) within 2 weeks after the commissioner has given the care
6management organization notice of the commissioner's intention to proceed under
7this subsection, the commissioner may commence an action for a forfeiture in such
8sum as the court considers just, but not exceeding $5,000 for each day that the
9violation continues after the commencement of the action until judgment is
10rendered. No forfeiture may be imposed under this subsection if at the time the
11action was commenced the care management organization was in compliance with
12the order, nor for any violation of an order occurring while any proceeding for judicial
13review of the order was pending, unless the court in which the proceeding was
14pending certifies that the claim of invalidity or nonapplicability of the order was
15frivolous or a sham. If after judgment is rendered the care management organization
16does not comply with the order, the commissioner may commence a new action for
17a forfeiture and may continue commencing actions until the person complies. The
18proceeds of all actions under this subsection, after deduction of the expenses of
19collection, shall be paid into the common school fund of the state.
AB75-ASA1,1628,24 20(4) Forfeitures and civil penalties. (a) Restitutionary forfeiture. Whoever
21violates an order issued under s. 648.10 (2) that is effective under s. 601.63, any
22section of this chapter, or any rule relating to this chapter shall forfeit to the state
23twice the amount of any profit gained from the violation, in addition to any other
24forfeiture or penalty imposed.
AB75-ASA1,1629,3
1(b) Forfeiture for violation of order. Whoever violates an order issued under s.
2648.10 (2) that is effective under s. 601.63 shall forfeit to the state not more than
3$1,000 for each violation. Each day that the violation continues is a separate offense.
AB75-ASA1,1629,94 (c) Forfeiture for violation of statute or rule. Whoever violates, intentionally
5aids in violating, or knowingly permits a person over whom he or she has authority
6to violate a section of this chapter or a rule promulgated under this chapter shall
7forfeit to the state not more than $1,000 for each violation. If the section or rule
8violated imposes a duty to make a report to the commissioner, each week of delay in
9complying with the duty is a new violation.
AB75-ASA1,1629,1710 (d) Procedure. The commissioner may order any person to pay a forfeiture
11imposed under this subsection, which shall be paid into the common school fund. If
12the order is issued without a hearing, the affected person may demand a hearing
13through procedures described under s. 601.62 (3) (a). If the person fails to request
14a hearing, the order is conclusive as to the person's liability. The scope of review for
15forfeitures ordered is that specified under s. 227.57. The commissioner may cause
16an action to be commenced to recover the forfeiture. Before an action is commenced,
17the commissioner may compromise the forfeiture.
AB75-ASA1,1629,23 18(5) Criminal penalty. Whoever intentionally violates or intentionally permits
19any person over whom he or she has authority to violate or intentionally aids any
20person in violating any section of this chapter, any rule promulgated to administer
21this chapter, or any order issued under s. 648.10 (2) that is effective under s. 601.63
22is guilty of a Class I felony, unless a specific penalty is provided elsewhere in the
23statutes. Intent has the meaning expressed under s. 939.23.
AB75-ASA1,1630,5 24648.45 Affiliates of permittee. (1) Information. A permittee and a person
25attempting to acquire or having control of a permittee, shall report to the

1commissioner the information concerning the permittee, its affiliates, and the person
2attempting to acquire control of the permittee that the commissioner requires by
3rule. The commissioner may promulgate rules prescribing the timing of reports
4under this subsection, including requiring periodic reporting and the form and
5procedure for filing reports.
AB75-ASA1,1630,8 6(2) Report for affiliates. The permittee may report on behalf of all affiliated
7entities if it provides all the information that would be required if each affiliate
8reported separately.
AB75-ASA1,1630,13 9(3) Consent to jurisdiction. Every permittee shall promptly submit to the
10commissioner a statement from each of its affiliates that the affiliate agrees to be
11subject to the jurisdiction of the commissioner and the courts of this state for the
12purposes of this chapter. A governmental unit is not subject to this requirement. The
13commissioner may exempt other affiliates from this subsection.
AB75-ASA1,1630,16 14(4) Information order. The commissioner may, by order, require any permittee
15or any person attempting to acquire or having control of the permittee, to report
16information under sub. (1) or other information to the commissioner.
AB75-ASA1,1630,19 17(5) Transactions with affiliates. Neither a permittee nor an affiliate of the
18permittee may enter into a transaction between the permittee and affiliate unless
19all of the following apply:
AB75-ASA1,1630,2120 (a) The transaction at the time it is entered into is reasonable and fair to the
21interests of the permittee.
AB75-ASA1,1630,2522 (b) The books, accounts, and records of each party to the transaction are kept
23in a manner that clearly and accurately discloses the nature and details of the
24transaction and, in accordance with generally accepted accounting principles,
25permits ascertainment of charges relating to the transaction.
AB75-ASA1,1631,3
1(c) The permittee's financial condition following any dividends or distributions
2to shareholders or a person having control of the permittee is reasonable in relation
3to the permittee's outstanding liabilities and is adequate to its financial needs.
AB75-ASA1,1631,54 (d) The transaction complies with any other standard that the commissioner,
5after consulting with the department, prescribes by rule.
AB75-ASA1,1631,10 6(6) Transactions subject to disclosure. (a) Affiliated transactions to be
7reported.
1. The commissioner, after consulting with the department, may
8promulgate rules requiring a permittee, a person attempting to acquire or having
9control of a permittee, and affiliates of a permittee to report a transaction or a group
10or series of transactions, if all of the following are satisfied:
AB75-ASA1,1631,1311 a. The transaction is between a permittee and a person attempting to acquire
12or having control of the permittee or an affiliate of the permittee, or the transaction
13directly or indirectly benefits the person or affiliate.
AB75-ASA1,1631,1514 b. The transaction is, or the group or series of transactions are, material to the
15permittee.
AB75-ASA1,1631,1916 2. Transactions that are material to a permittee for the purposes of subd. 1.
17include management contracts, service contracts, and cost-sharing arrangements.
18The commissioner, after consulting with the department, may prescribe by rule
19standards for determining whether a transaction is material under this subsection.
AB75-ASA1,1632,220 3. No permittee, person attempting to acquire or having control of a permittee,
21or affiliate of the permittee may enter into a transaction required to be reported to
22the commissioner under this subsection unless the permittee, person, and affiliate
23report the transaction to the commissioner in the form and by the date before the
24effective date of the transaction that are prescribed by the commissioner by rule,
25after consulting with the department. The commissioner may not require the

1transaction to be reported earlier than 30 days before the effective date of the
2transaction.
AB75-ASA1,1632,63 (b) Disapproval. The commissioner may, within the period prescribed in par.
4(a) 3., disapprove any transaction reported under par. (a) if the commissioner finds,
5after consulting with the department, that it would violate the law or would be
6contrary to the interests of enrollees of the permittee, the department, or the public.
AB75-ASA1,1632,107 (c) Transactions prohibited. No permittee, person attempting to acquire or
8having control of the permittee, or affiliate of the permittee may enter into a
9transaction that is not reported as required under par. (a) or that is disapproved by
10the commissioner under par. (b).
AB75-ASA1,1632,1711 (d) Voidable transactions. If a permittee, person attempting to acquire or
12having control of the permittee, or affiliate enters into a transaction in violation of
13this section, the permittee may void the transaction, obtain an injunction, and
14recover from the person or affiliate the amount necessary to restore the permittee to
15its condition had the transaction not occurred. The commissioner may order a
16permittee to void the transaction, to commence an action against the person or
17affiliate, or to take other action.
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