SB599: Bill Text

SB599,17,9 (5) The commission shall keep a complete record of all hearings and investiga tions conducted under sub. (3) using a stenographic, electronic or other method to re cord all testimony presented. The commission shall provide a transcribed, certified copy of all or any part of this record on the request of any party to a hearing or inves tigation, but may charge the requester for the costs involved.

SB599,17,14 (6) (a) Any person may request a hearing under s. 227.44, regardless of whether any other hearing is authorized by law or is authorized at the discretion of the com mission or whether any other proceeding is authorized by rule of the commission, subject to the limitation that no person may receive more than one contested case hearing concerning a particular act or failure to act by the commission.

SB599,17,16 (b) Notwithstanding par. (a), no person may request a hearing under s. 227.44 pertaining to the subject matter of a hearing under sub. (3).

SB599,17,18 (c) The right to a hearing under s. 227.44, as specified in this subsection, applies only to subject matter pertaining to this subchapter.

SB599,18,6 196.999 Commission orders. (1) (a) The commission shall determine allow able financial requirements under s. 196.995 and disallowances under s. 196.997. From the difference between these amounts, the commission shall subtract the hos pital's estimated relief payments and medical assistance payments under ch. 49 and medicare payments under 42 USC 1395 to 1395ccc, unless the commission deter mines that the hospital's estimates are incorrect, in which case the commission shall subtract its own estimates of the hospital's relief, medical assistance and medicare payments. The commission shall, by order, establish maximum rates that allow the hospital to generate revenue sufficient to provide this remainder. The commission shall, by rule, establish acceptable methods of estimating payments by relief, medi cal assistance and medicare under this paragraph. Each hospital shall choose one of these methods and use it consistently unless the commission authorizes the hospi tal to change its method.

SB599,18,15 (b) Unless the hospital requests a hearing under s. 196.998 (3), the commission shall issue its order under par. (a) within 15 days after the commission staff submits its recommendations or, if the hospital requests a settlement conference under s. 196.998 (1), within 15 days after the commission determines that the hospital will not seek a hearing following the conclusion of the settlement conference. If the hospi tal disputes only part of the recommendations of the commission staff, the commis sion may establish maximum rates under par. (a) concerning the recommendations with which the hospital agrees prior to the conclusion of the hearing under s. 196.998 (3).

SB599,18,21 (c) If the hospital disputes the recommendations of the commission staff and a hearing is held under s. 196.998 (3) (c), the commission shall establish by order maximum rates for the hospital's year under review at the conclusion of the hearing. If the commission conducts an informal hearing under s. 196.998 (3) (a) and (b), it shall issue its order within 50 days after the date on which the hospital requested the hearing.

SB599,18,25 (d) 1. The commission shall state findings of fact and the reasons supporting each order that it issues concerning financial requirements and rates. If the commis sion denies any part of a rate request, it shall also specify, as part of its order, any financial requirements that it has disallowed.

SB599,19,21 2. Any hospital may apply an increase in its rates selectively, if the aggregate increase in its rates does not exceed the amount authorized by the commission. Prior to instituting its rate increase, the hospital shall explain to the commission its meth od of applying the rate increase and allow the commission 5 working days, as defined in s. 227.01 (14), to determine if the aggregate increase in rates exceeds the autho rized amount. Failure to disapprove the hospital's method of applying the rate in crease within this period constitutes an approval. If the commission approves the hospital's method of applying the rate increase, the commission may not challenge the method prior to the date of a succeeding review under s. 196.994 (1) except as pro vided in sub. (4) (a). If the commission disapproves the hospital's method of applying the rate increase, it shall recommend an alternate method. If the hospital fails to modify its method of applying the rate increase, the commission may challenge the method in circuit court. In addition to any other remedy the court may impose under s. 196.9994, if the court finds that the hospital's method generates an aggregate in crease in the hospital's rates that is inconsistent with the amount authorized by the commission, the hospital shall forfeit an amount equal to 50% of the amount over charged and shall comply with the alternate method recommended by the commis sion or with any other method ordered by the court that the court finds more consis tent with the commission's order. No hospital may change a method of applying its rate increase that has received the commission's approval without submitting the changes to the commission for its approval under this subdivision.

SB599,20,2 3. Any hospital receiving a rate increase that may only commence between the 2nd and 7th months of its fiscal year may make an adjustment to the rate increase, that applies to that fiscal year only, in order to generate an amount of revenue equal to the amount that would have been generated if the hospital could have commenced the rate increase beginning with the first month of its fiscal year.

SB599,20,6 (e) Except as provided in s. 196.9991, even if a party seeks judicial review of a commission order, the affected hospital may continue to bill payers at the rates es tablished by the commission. No hospital that bills payers under this paragraph ad versely affects its right to contest the rates established by the commission.

SB599,20,9 (1m) Notwithstanding sub. (1) (b) and ss. 196.994 (1), 196.997 (2) and 196.998, at the request of a hospital the commission may waive the procedures for review of a rate request and issue an interim order in an emergency.

SB599,20,12 (2) The commission shall determine the rates of each hospital independently using criteria specified in s. 196.996, but in making these determinations the com mission may use methods of identifying similar hospitals.

SB599,20,20 (3) The commission may promulgate rules establishing a system that defines rates as aggregate charges based on case mix measurements if the commission sub mits its proposed system to the joint committee on finance under s. 13.10, receives that committee's approval and holds a public hearing prior to promulgating its rules. Such a system may not take effect prior to July 1, 1997, shall be consistent with the standard under s. 196.996 (1), shall take into account the reasonable financial re quirements of hospitals and shall ensure quality of care and a reasonable cost to pa tients.

SB599,20,21 (4) The commission may not:

SB599,20,25 (a) Reduce rates that it has established, prior to the date the commission sched ules a succeeding review under s. 196.994 (1), unless the hospital misstated any ma terial fact at a prior rate-setting proceeding. Projections on the volume of hospital services utilized do not constitute material facts under this paragraph.

SB599,21,2 (b) During a succeeding review under s. 196.994 (1), reduce rates from levels that it has previously established, except in any of the following situations:

SB599,21,4 1. The hospital implements an unauthorized increase in its approved rates, un less the increase is trivial.

SB599,21,6 2. The hospital uses the funds that it has prospectively accumulated for an au thorized capital project for purposes other than the authorized project.

SB599,21,8 4. The hospital's actual total revenue for its fiscal year exceeds it actual total financial requirements by more than 10%.

SB599,21,12 (c) Interfere directly in the personal or decision-making relationships between a patient and the patient's physician, except as provided in ss. 196.9993 and 196.9994 (2). This paragraph does not limit the commission's ability to make deter minations under sub. (1) (a) or s. 196.997.

SB599,21,15 (d) Control directly the volume or intensity of hospital utilization, except as provided in ss. 196.9993 and 196.9994 (2). This paragraph does not limit the commis sion's ability to make determinations under sub. (1) (a) or s. 196.997.

SB599,21,19 (e) Restrict the freedom of patients to receive care at a hospital consistent with their religious preferences or request a hospital that is affiliated with a religious group to act in a manner contrary to the mission and philosophy of the religious group.

SB599,21,22 (f) Restrict directly the freedom of hospitals to exercise management decisions in complying with the rates established by the commission, unless a hospital agrees to a condition attached to the establishment of particular rates.

SB599,21,24 (g) Require the submission of unrelated financial data from religious groups affiliated with a hospital.

SB599,22,3 196.9991 Injunctions of commission orders. No injunction may be issued to suspend or stay enforcement of an order of the commission unless all of the follow ing occur:

SB599,22,7 (1) All parties to the proceeding from which the commission's order was issued are notified of the petition seeking an injunction, are given an opportunity to appear at a hearing prior to the issuance of the injunction and are made parties to the pro ceeding in circuit court.

SB599,22,12 (2) The party seeking the injunction enters into an undertaking by at least 2 sureties at a level that the circuit court finds sufficient to guarantee the payment of all damages the hospital may sustain by delaying the effect of the commission's order. This subsection does not apply to a hospital that was a party to the proceeding from which the commission's order was issued.

SB599,22,15 196.9992 Expedited review, expedited cases and exempt hospitals. (1) The commission may promulgate rules under which hospitals meeting specific crite ria receive expedited review of rate requests under this subchapter.

SB599,22,18 (2) (a) A hospital whose gross annual patient revenue is less than $10,000,000, adjusted as provided in s. 196.9995, for the hospital's last fiscal year is eligible to re ceive automatic approval of its rate request if it meets all of the following criteria:

SB599,22,20 1. The commission has conducted a complete review of the hospital's rates and has set the hospital's rates in a preceding year.

SB599,22,23 2. The hospital requests a rate increase that is less than an inflationary index consisting of the average of the consumer price index and the hospital market basket index.

SB599,23,3 (b) Any hospital that receives automatic approval of its rate request under this subsection shall publish as a class 1 notice under ch. 985, in one or more newspapers likely to give notice to its patients and payers, a list of the price adjustments it is mak ing to 100 of its charge elements as specified by the commission. The hospital shall publish this notice prior to implementing its rate increase.

SB599,23,5 (c) The commission may, by rule, extend automatic approval status under this subsection to other hospitals.

SB599,23,10 (2m) The commission may grant hospitals whose gross annual patient revenue is less than $10,000,000, adjusted as provided in s. 196.9995, a rate increase that takes effect over a 2-year period with an automatic escalation clause taking effect at the end of the first year. A hospital that receives a 2-year rate increase is not re quired to request a rate increase at the end of the first year.

SB599,23,12 (3) Any judicial proceeding affecting a rule or decision of the commission shall be heard and determined as expeditiously as possible.

SB599,23,16 196.9993 Utilization review program. (1) The commission shall approve an all-patient utilization review program for each hospital that shall conform to re quirements of federal regulations on utilization review programs. The commission may evaluate these programs as part of its monitoring functions under s. 196.994 (3).

SB599,23,22 (2) The commission shall contract with one or more independent utilization re view programs to develop review standards, and the commission may contract with any person to monitor implementation of these programs by hospitals and to perform peer review functions for hospitals that fail to meet the performance standards adopted by the commission. The commission may not contract with state agencies, other than the University of Wisconsin System, under this subsection.

SB599,24,2 (3) Each utilization review program the commission approves shall include a general summary of utilization within the hospital. These programs need not other wise be identical but shall meet minimum standards established by the commission and shall do all of the following:

SB599,24,4 (a) Evaluate the medical necessity or appropriateness of care relative to admis sions, lengths of stay and ancillary services.

SB599,24,7 (b) Report to the commission, in conjunction with each hospital's submission of proposed financial requirements, any findings that it has made regarding unnec essary or inappropriate medical care utilization and associated costs.

SB599,24,12 196.9994 Enforcement. (1) (a) Until the commission establishes different rates under this subchapter, no hospital may charge any payer an amount exceeding the rates established as of the effective date of this paragraph .... [revisor inserts date]. No hospital may charge any payer an amount exceeding the rates established under this subchapter.

SB599,24,19 (b) The attorney general may seek a judicial remedy to enforce compliance with par. (a) if the attorney general first notifies the hospital and provides the hospital a reasonable time to correct a violation. The commission may seek a judicial remedy to enforce compliance with any statutory requirement or with any rule or order of the commission if it first notifies the hospital and provides the hospital a reasonable time to correct a violation. The commission shall commence any action under this para graph in the circuit court for the county in which the hospital is located.

SB599,24,23 (c) Any court that finds an intentional failure to comply with the rates under this subsection may impose a forfeiture of up to $5,000. Each week that a hospital continues its intentional failure to comply with the rates constitutes a separate viola tion.

SB599,25,4 (2) Neither a hospital nor a physician may be paid for a service that a utiliza tion review program under s. 196.9993 determines is medically unnecessary or inap propriate. If the hospital or physician has already been paid, the hospital or physi cian shall reimburse the payer within 30 days. The commission may commence an action to enforce this subsection in the circuit court for the county in which the hospi tal is located.

SB599,25,7 (3) Any court with jurisdiction over an action brought under this section may adopt remedies that it finds necessary to enforce compliance. Remedies under this section apply notwithstanding the existence or pursuit of any other remedy.

SB599,25,10 (4) Any person who intentionally violates an order of a hearing examiner is sued under s. 227.46 (7) to protect trade secrets in a contested case brought under this subchapter shall forfeit $5,000.

SB599,25,14 196.9995 Annual adjustments. The limits on gross annual patient revenue in ss. 196.997 (1) (b) and 196.9992 (2) (a) (intro.) and (2m) shall be adjusted annually to reflect annual changes in the average of the consumer price index and the hospital market basket index.

SB599,25,15 196.9996 Assessments. (1) In this section:

SB599,25,18 (a) "Commercial insurance" includes a group or individual disability insurance policy, as defined in s. 632.895 (1) (a), an employer's self-insured health care plan and worker's compensation.

SB599,25,21 (b) "Deduction" means the portion of a charge that was incurred by a patient but was not received from 3rd-party payers or governmental or private payment. "Deduction" includes charity care but does not include bad debt.

SB599,25,23 (c) "Expense" means the cost of operation, including bad debt, that is charged to a hospital during the hospital's fiscal year.

SB599,26,2 (d) "Gross patient revenue" means the total charges to medicare, as defined in s. 49.498 (1) (f), the medical assistance program, other public programs, commercial insurance and other self-payers or nonpublic payers, that are generated by a hospi tal from inpatient and outpatient services.

SB599,26,4 (e) "Net income" means total revenue and nonoperating gains in excess of ex penses and nonoperating losses.

SB599,26,5 (f) "Net patient revenue" means gross patient revenue minus deductions.

SB599,26,7 (g) "Nonoperating gains" means gifts, donations, endowments, return on in vestments and any other gains that are not related to patient care.

SB599,26,10 (h) "Nonoperating losses" means state and federal corporate income and real estate taxes and other losses that are not directly related to patient care or hospital- related patient services.

SB599,26,13 (i) "Other public programs" include programs operated by or contracted for by county departments under s. 46.215, 46.22 or 46.23 and the relief program under ch. 49.

SB599,26,16 (j) "Other revenue" means revenue from services, other than health care ser vices, provided to patients and revenue from sales to and services provided to nonpa tients.

SB599,26,17 (k) "Total revenue" means the sum of net patient revenue and other revenue.

SB599,27,3 (2) Beginning July 1, 1997, the commission shall, within 90 days after the com mencement of each fiscal year, estimate the total amount of revenue required for ad ministration by the commission of this subchapter during that fiscal year and assess that estimated total amount to hospitals, under the rates established by rule under s. 196.993 (2) and in proportion to each hospital's respective net income during the hospital's most recently concluded entire fiscal year. The commission may not assess under this subsection a hospital that has a net income of 3% or less over the net in come for the hospital's next most recently concluded entire fiscal year. Each hospital that is assessed shall pay the assessment by the December 1 following the assess ment. The commission shall credit all payments of assessments to the appropriation under s. 20.155 (3) (gm).

SB599,27,6 196.9998 Capital expenditure review program. (1) Applicability. Begin ning on July 1, 1997, no person may do any of the following without first obtaining the commission's approval:

SB599,27,14 (a) Except as provided in sub. (2), obligate for a capital expenditure, by or on behalf of a hospital, that exceeds $1,000,000. The cost of the studies, surveys, plans and other activities essential to the proposed capital expenditure shall be included in determining the value of the capital expenditure. Any donation of equipment or facilities that, if acquired directly, would be subject to review under this section is a capital expenditure. Any transfer of equipment or facilities for less than fair market value that, if transferred at fair market value, would be subject to review under this section is a capital expenditure.

SB599,27,19 (b) Implement services new to the hospital that exceed $500,000 in a 12-month period, including an organ transplant program, burn center, neonatal intensive care program, cardiac program or air transport services; implement other services or pro grams specified by the commission by rule; or add psychiatric or chemical dependen cy beds.

SB599,27,23 (c) Obligate for an expenditure by or on behalf of a hospital, independent practi tioner, limited liability company, partnership, unincorporated medical group or ser vice corporation, as defined in s. 180.1901 (2), that exceeds $500,000 for clinical medi cal equipment.

SB599,27,24 (d) Purchase or otherwise acquire a hospital.

SB599,27,25 (e) Construct or operate an ambulatory surgery center or a home health agency.

SB599,28,4 (2) Exemptions from capital expenditure review. (a) Subsection (1) does not apply if a person has, prior to the effective date of this subsection .... [revisor inserts date], entered into a legally enforceable contract, promise or agreement with another to do any of the activities specified in sub. (1) (a) to (e).

SB599,28,11 (b) A person may obligate for a capital expenditure by or on behalf of a hospital without obtaining the approval of the commission if the expenditure is for heating, air conditioning, ventilation, electrical systems, energy conservation, telecommu nications, computer systems or nonsurgical outpatient services, unless any such ex penditure is a constituent of another project reviewable under sub. (1) or unless any such expenditure would exceed 20% of a hospital's gross annual patient revenue for its last fiscal year.

SB599,28,12 (3) Innovative medical technology exemption. (a) In this subsection:

SB599,28,17 1. "Clinical trial" means clinical research conducted under approved protocols in compliance with federal requirements applicable to investigations involving hu man subjects, including the requirement for an informed consent advising the pa tient clearly of the risks associated with participating in the clinical development and evaluation project.

SB599,28,20 2. "Innovative medical technology" means equipment or procedures that are potentially useful for diagnostic or therapeutic purposes and that introduce new technology in the diagnosis and treatment of illness.

SB599,28,25 (b) The commission may grant an exemption from the requirements of approval under this section for the research, development and evaluation of innovative medi cal technology, the development of the clinical applications of this technology or the research, development and evaluation of a major enhancement to existing medical technology if all of the following occur:

SB599,29,3 1. The commission receives an application for an exemption from a person in tending to undertake a capital expenditure in excess of $500,000 or intending to un dertake a substantial change in a health service.

SB599,29,7 2. Prior to applying for an exemption, preliminary animal studies or prelimi nary clinical investigation establishes that the innovative medical technology or ma jor enhancement to existing medical technology has a reasonable probability of ad vancing clinical diagnosis or therapy.

SB599,29,10 3. In the development and evaluation of the clinical applications, the applicant undertakes scientifically sound studies to determine clinical efficacy, safety, cost-ef fectiveness and appropriate utilization levels in a clinical setting.

SB599,29,13 4. The clinical trials, evaluation or research are conducted according to scientif ically sound protocols subject to peer review and approval in accord with the require ments applicable to investigations and clinical evaluation involving human subjects.

SB599,29,15 5. The innovative medical technology is being installed to conduct necessary research, development and evaluation.

SB599,29,21 6. The applicant does not include any recovery of capital expenses incurred as part of an exemption under this subsection in its expense and revenue budget for pur poses of rate setting until the applicant receives the approval of the federal food and drug administration and of the commission under this section for general medical use. The applicant may recover operating expenses only after all of the following oc cur:

SB599,29,22 a. Approval by the federal food and drug administration for safety and efficacy.

SB599,29,23 b. A 3rd party agrees to pay for these expenses.

SB599,30,3 (c) The commission may not grant more than 2 exemptions for any particular type of innovative medical technology or for any particular major enhancement to existing medical technology.

SB599,30,9 (4) Public hearing requirement. (a) Any person intending to undertake a proj ect or activity subject to this section shall cause to be published a class 1 notice under ch. 985 in the official newspaper designated under s. 985.04 or 985.05 or, if none ex ists, in a newspaper likely to give notice in the area of the proposed project or activity. The notice shall describe the proposed project or activity and describe the time and place for the public hearing required under par. (b).

SB599,30,22 (b) No sooner than 30 days after the date of publication of the notice under par. (a), the person shall conduct a public hearing on the proposed project or activity. The hearing shall be on the expected impact of the proposed project or activity on health care costs, the expected improvement, if any, in the local health care delivery system, and any other issue related to the proposed project or activity. Management staff, if any, of the person seeking to undertake the project or activity and, if possible, at least 3 members of the governing board of a not-for-profit health care provider, if any, seeking to undertake the project or activity shall attend the public hearing to review public testimony. The person seeking to undertake the project or activity shall record accurate minutes of the meeting, shall include copies of the minutes and any written testimony presented at the hearing in an application concerning the project or activity that is submitted under sub. (7) and shall submit the application within 10 days after the date of the public hearing.

SB599,31,2 (5) Notification requirement. Any person intending to undertake a project subject to this section shall notify the commission in writing of this intent at least 30 days prior to submitting an application for review. Any application expires unless the commission declares it complete within one year after the date the applicant noti fies the commission of its intent to undertake the project.

SB599,31,7 (6) Application fee. Each application for review of a project or activity subject to this section shall be accompanied by a fee that is established in rules promulgated by the commission. The commission shall promulgate rules that establish applica tion fees that are sufficient to fund all of the commission's expenses under this sec tion.

SB599,31,14 (7) Review requirements. (a) The commission's review of an application be gins on the date that it receives a completed application, including the fee under sub. (6). On or before the 20th day of the month following receipt of a completed applica tion, the commission shall send a notice of receipt of a completed application to the applicant and shall publish a class 2 notice under ch. 985 containing this information in a daily newspaper with general circulation in the area where the proposed project would be located.

SB599,31,22 (b) The commission may group applications for the same or similar types of faci lities, services or applications that are proposed, for concurrent review. The commis sion shall base its review under this paragraph on a comparative analysis of these applications, using the criteria specified in sub. (8) and a ranking of its priorities. The applicant has the burden of proving, by a preponderance of the evidence, that each of the criteria specified in sub. (8) has been met or does not apply to the project. The commission shall, by rule, establish its review requirements under this para graph.

SB599,32,3 (8) Review criteria. The commission shall use the following criteria in review ing each application under this section, plus any additional criteria that it develops by rule. The commission shall consider cost containment as its first priority in apply ing these criteria, and shall consider the recommendations and comments of affected parties. The commission may not approve any project under this section unless the applicant demonstrates all of the following: