Analysis by the Legislative Reference Bureau
Current law contains certain requirements that apply to health maintenance
organizations, preferred provider plans and limited service health organizations
(managed care plans). Those requirements address when an employer must offer a
standard plan in addition to a managed care plan, coverage under a managed care
plan for a child who is away at school, reporting disciplinary action taken against a
participating provider and a grievance procedure. This bill provides for additional
requirements which, in general, benefit enrollees under managed care plans and
providers that provide health care services on behalf of those plans.
The bill requires a managed care plan to ensure that enrollees have adequate
access to health care services by including a sufficient number and sufficient types
of primary care providers throughout the service area of the plan. The plan must
cover the services of nonparticipating specialist physicians for those enrollees who
have medical conditions that cannot be adequately treated by participating
providers. A managed care plan must provide enrollees with 24-hour telephone
access for emergency care and authorization for care. A managed care plan must
cover emergency care and may not require prior authorization for such care.
A managed care plan must permit an enrollee to choose a primary provider from
a diverse list of participating providers. An enrollee with special medical needs must
be able to select a specialist physician as a primary provider. A managed care plan
must cover 2nd opinions from participating providers and must offer a
point-of-service option under which an enrollee may obtain covered services from
one or more nonparticipating providers of the enrollee's choice.
A managed care plan must provide coverage for any drug or device that is
approved by the federal food and drug administration, as long as it is determined to
be medically appropriate and necessary by the treating physician, regardless of
whether the drug or device is being used for the purpose for which approved by the
federal food and drug administration. The treating physician must be able to
determine the drug therapy that is appropriate for the enrollee. A managed care
plan must establish a drug utilization review program for the purpose of ensuring
appropriate drug therapies for enrollees.
If a managed care plan limits coverage for experimental treatment, the plan
must disclose who is authorized to make a determination on limiting coverage and
the criteria used to determine whether a treatment, procedure, drug or device is
experimental. Whenever coverage for experimental treatment is denied, the plan
must provide the enrollee with a denial letter that advises the enrollee of who made
the coverage decision, the reasons for the denial, alternative treatments that would
be covered under the plan and the plan's grievance and appeal procedures.
A managed care plan must establish an internal quality assurance program, a
peer review process and processes for selecting participating providers and

reevaluating those providers after initial acceptance into the plan. A managed care
plan must appoint a physician as medical director to be responsible for the treatment
policies, protocols, quality assurance activities and utilization management
decisions of the plan.
A managed care plan must inform enrollees of any financial arrangement
between the plan and a participating physician that operates as an incentive or
bonus for restricting services. In addition, a managed care plan may not penalize or
terminate the contract of a participating provider for discussing with an enrollee
financial incentives under the plan. A managed care plan may not penalize or
terminate the contract of a participating provider for making referrals to other
participating providers or for discussing medically necessary or appropriate care
with an enrollee.
Under current law, the commissioner of insurance is required to promulgate
rules for preferred provider plans to ensure that enrollees are not forced to travel
excessive distances to receive health care services and to ensure continuity of care
for enrollees. The bill requires those rules to apply more broadly to all managed care
plans.
For further information see the state and local fiscal estimate, which will be
printed as an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB673, s. 1 1Section 1. 40.51 (12) of the statutes is repealed and recreated to read:
AB673,3,32 40.51 (12) Every managed care plan, as defined in s. 609.01 (3c), that is offered
3by the state under sub. (6) shall comply with ch. 609.
AB673, s. 2 4Section 2. 40.51 (13) of the statutes is created to read:
AB673,3,65 40.51 (13) Every managed care plan, as defined in s. 609.01 (3c), that is offered
6by the group insurance board under sub. (7) shall comply with ch. 609.
AB673, s. 3 7Section 3. 51.20 (7) (am) of the statutes is amended to read:
AB673,4,28 51.20 (7) (am) A subject individual may not be examined, evaluated or treated
9for a nervous or mental disorder pursuant to a court order under this subsection
10unless the court first attempts to determine whether the person is an enrolled
11participant
enrollee of a health maintenance organization, limited service health
12organization or preferred provider plan, as defined in s. 609.01 (4), and, if so, notifies

1the organization or plan that the subject individual is in need of examination,
2evaluation or treatment for a nervous or mental disorder.
AB673, s. 4 3Section 4. 601.42 (1g) (d) of the statutes is amended to read:
AB673,4,94 601.42 (1g) (d) Statements, reports, answers to questionnaires or other
5information, or reports, audits or certification from a certified public accountant or
6an actuary approved by the commissioner, relating to the extent liabilities of a health
7maintenance organization insurer are or will be covered liabilities, as defined in s.
8609.01 (1)
liabilities for health care costs for which an enrollee or policyholder of the
9health maintenance organization insurer is not liable to any person under s. 609.91
.
AB673, s. 5 10Section 5. 609.01 (1) of the statutes is repealed.
AB673, s. 6 11Section 6. 609.01 (1c) of the statutes is created to read:
AB673,4,1612 609.01 (1c) "Emergency medical condition" means a medical condition of a
13person that has a sudden onset and that manifests itself by symptoms of sufficient
14severity, including severe pain, to lead a prudent layperson who possesses an average
15knowledge of health and medicine to reasonably conclude that a lack of immediate
16medical attention might result in any of the following:
AB673,4,1717 (a) Serious jeopardy to the person's health.
AB673,4,1818 (b) Serious impairment to the person's bodily functions.
AB673,4,1919 (c) Serious dysfunction of any of the person's bodily organs or parts.
AB673, s. 7 20Section 7. 609.01 (1d) of the statutes is repealed and recreated to read:
AB673,4,2221 609.01 (1d) "Enrollee" means, with respect to a managed care plan, a person
22who is entitled to receive health care services under the plan.
AB673, s. 8 23Section 8. 609.01 (1p) of the statutes is created to read:
AB673,5,224 609.01 (1p) "Health care professional" means any individual licensed,
25registered, permitted or certified by the department of health and family services or

1the department of regulation and licensing to provide health care services, items or
2supplies in this state.
AB673, s. 9 3Section 9. 609.01 (2) of the statutes is amended to read:
AB673,5,94 609.01 (2) "Health maintenance organization" means a health care plan
5offered by an organization established under ch. 185, 611, 613 or 614 or issued a
6certificate of authority under ch. 618 that makes available to its enrolled
7participants
enrollees, in consideration for predetermined periodic fixed payments,
8comprehensive health care services performed by providers selected by the
9organization
participating in the plan.
AB673, s. 10 10Section 10. 609.01 (3) of the statutes is amended to read:
AB673,5,1611 609.01 (3) "Limited service health organization" means a health care plan
12offered by an organization established under ch. 185, 611, 613 or 614 or issued a
13certificate of authority under ch. 618 that makes available to its enrolled
14participants
enrollees, in consideration for predetermined periodic fixed payments,
15a limited range of health care services performed by providers selected by the
16organization
participating in the plan.
AB673, s. 11 17Section 11. 609.01 (3c) of the statutes is created to read:
AB673,5,1918 609.01 (3c) "Managed care plan" means a health maintenance organization,
19limited service health organization or preferred provider plan.
AB673, s. 12 20Section 12. 609.01 (3m) of the statutes is created to read:
AB673,5,2321 609.01 (3m) "Participating" means, with respect to a physician or other
22provider, under contract with a managed care plan to provide health care services,
23items or supplies to enrollees of the plan.
AB673, s. 13 24Section 13. 609.01 (3r) of the statutes is created to read:
AB673,5,2525 609.01 (3r) "Physician" has the meaning given in s. 448.01 (5).
AB673, s. 14
1Section 14. 609.01 (4) of the statutes is amended to read:
AB673,6,72 609.01 (4) "Preferred provider plan" means a health care plan offered by an
3organization established under ch. 185, 611, 613 or 614 or issued a certificate of
4authority under ch. 618 that makes available to its enrolled participants enrollees,
5for consideration other than predetermined periodic fixed payments, either
6comprehensive health care services or a limited range of health care services
7performed by providers selected by the organization participating in the plan.
AB673, s. 15 8Section 15. 609.01 (4m) of the statutes is created to read:
AB673,6,109 609.01 (4m) "Primary care physician" means a physician specializing in family
10medical practice, general internal medicine, obstetrics and gynecology or pediatrics.
AB673, s. 16 11Section 16. 609.01 (5) of the statutes is repealed and recreated to read:
AB673,6,1312 609.01 (5) "Primary provider" means a participating health care professional
13who coordinates, supervises and may provide ongoing care to an enrollee.
AB673, s. 17 14Section 17. 609.01 (6) of the statutes is repealed and recreated to read:
AB673,6,1615 609.01 (6) "Specialist physician" means a physician who is not a primary care
16physician.
AB673, s. 18 17Section 18. 609.01 (7) of the statutes is amended to read:
AB673,6,1918 609.01 (7) "Standard plan" means a health care plan other than a health
19maintenance organization or a preferred provider
that is not a managed care plan.
AB673, s. 19 20Section 19. 609.05 (1) of the statutes is amended to read:
AB673,6,2421 609.05 (1) Except as provided in subs. (2) and (3), a health maintenance
22organization, limited service health organization or preferred provider
managed
23care
plan shall permit its enrolled participants enrollees to choose freely among
24selected participating providers.
AB673, s. 20 25Section 20. 609.05 (2) of the statutes is amended to read:
AB673,7,4
1609.05 (2) A health care plan under sub. (1) Subject to s. 609.24 (2) and (3), a
2managed care plan
may require an enrolled participant enrollee to designate a
3primary provider and to obtain health care services from the primary provider when
4reasonably possible.
AB673, s. 21 5Section 21. 609.05 (3) of the statutes is amended to read:
AB673,7,106 609.05 (3) Except as provided in ss. 609.65 and 609.655, a health managed care
7plan under sub. (1) may require an enrolled participant enrollee to obtain a referral
8from the primary provider designated under sub. (2) to another selected
9participating provider prior to obtaining health care services from the other selected
10that participating provider.
AB673, s. 22 11Section 22. 609.10 (1) (a) of the statutes is amended to read:
AB673,7,1712 609.10 (1) (a) Except as provided in subs. (2) to (4), an employer that offers any
13of its employes a health maintenance organization or a preferred provider plan that
14provides comprehensive health care services shall also offer the employes a standard
15plan, as provided in pars. (b) and (c), that provides at least substantially equivalent
16coverage of health care expenses and that is not a health maintenance organization
17or a preferred provider plan
.
AB673, s. 23 18Section 23. 609.15 (1) (intro.) of the statutes is amended to read:
AB673,7,2119 609.15 (1) (intro.)  Each health maintenance organization, limited service
20health organization and preferred provider
managed care plan shall do all of the
21following:
AB673, s. 24 22Section 24. 609.15 (1) (a) of the statutes is amended to read:
AB673,7,2523 609.15 (1) (a) Establish and use an internal grievance procedure that is
24approved by the commissioner and that complies with sub. (2) for the resolution of
25enrolled participants' enrollees' grievances with the health managed care plan.
AB673, s. 25
1Section 25. 609.15 (1) (b) of the statutes is amended to read:
AB673,8,42 609.15 (1) (b) Provide enrolled participants enrollees with complete and
3understandable information describing the internal grievance procedure under par.
4(a).
AB673, s. 26 5Section 26. 609.15 (2) (a) of the statutes is amended to read:
AB673,8,76 609.15 (2) (a) The opportunity for an enrolled participant enrollee to submit
7a written grievance in any form.
AB673, s. 27 8Section 27. 609.15 (2) (b) of the statutes is amended to read:
AB673,8,139 609.15 (2) (b) Establishment of a grievance panel for the investigation of each
10grievance submitted under par. (a), consisting of at least one individual authorized
11to take corrective action on the grievance and at least one enrolled participant
12enrollee other than the grievant, if an enrolled participant enrollee is available to
13serve on the grievance panel.
AB673, s. 28 14Section 28. 609.17 of the statutes is amended to read:
AB673,8,20 15609.17 Reports of disciplinary action. Every health maintenance
16organization, limited service health organization and preferred provider
managed
17care
plan shall notify the medical examining board or appropriate affiliated
18credentialing board attached to the medical examining board of any disciplinary
19action taken against a selected participating provider who holds a license or
20certificate granted by the board or affiliated credentialing board.
AB673, s. 29 21Section 29. 609.20 (intro.) of the statutes is amended to read:
AB673,8,24 22609.20 Rules for preferred provider managed care plans. (intro.) The
23commissioner shall promulgate rules applicable to preferred provider plans relating
24to managed care plans
for all of the following purposes:
AB673, s. 30 25Section 30. 609.20 (1) of the statutes is amended to read:
AB673,9,2
1609.20 (1) To ensure that enrolled participants enrollees are not forced to travel
2excessive distances to receive health care services.
AB673, s. 31 3Section 31. 609.20 (2) of the statutes is amended to read:
AB673,9,54 609.20 (2) To ensure that the continuity of patient care for enrolled participants
5enrollees is not disrupted.
AB673, s. 32 6Section 32. 609.20 (4) of the statutes is amended to read:
AB673,9,147 609.20 (4) To ensure that employes offered a health maintenance organization
8or a
preferred provider plan that provides comprehensive services under s. 609.10
9(1) (a) are given adequate notice of the opportunity to enroll and complete and
10understandable information under s. 609.10 (1) (c) concerning the differences
11between the health maintenance organization or preferred provider plan and the
12standard plan, including differences between providers available and differences
13resulting from special limitations or requirements imposed by an institutional
14provider because of its affiliation with a religious organization.
AB673, s. 33 15Section 33. 609.22 of the statutes is created to read:
AB673,9,20 16609.22 Access to personnel and facilities. (1) Providers. A managed care
17plan shall include a sufficient number, and sufficient types, of primary care and
18specialist physicians throughout the service area of the plan to meet the anticipated
19needs of its enrollees and to provide its enrollees with a meaningful choice among
20physicians. A managed care plan shall offer all of the following:
AB673,9,2121 (a) Adequate accessible acute care hospital services for all of its enrollees.
AB673,9,2322 (b) An adequate number of accessible primary care physicians for all of its
23enrollees.
AB673,9,2524 (c) Subject to sub. (2), an adequate number of accessible specialist physicians
25for all of its enrollees within a reasonable distance or travel time.
AB673,10,2
1(d) The availability of specialty medical services, including physical therapy,
2occupational therapy and rehabilitation services.
AB673,10,53 (e) The availability of nonparticipating specialist physicians for enrollees
4whose medical conditions require services that cannot be provided by participating
5specialist physicians.
AB673,10,10 6(2) Nonparticipating specialists. If the treatment of a specific condition
7requires the services of a particular type of specialist physician and a managed care
8plan has no participating specialist physicians of that type, the managed care plan
9shall provide enrollees with the specific condition with coverage for the services of
10nonparticipating specialist physicians of that type.
AB673,10,15 11(3) Telephone access. A managed care plan shall provide telephone access to
12the plan for sufficient time during business and evening hours to ensure that
13enrollees have adequate access to routine health care services. A managed care plan
14shall provide 24-hour telephone access to the plan or to a participating provider for
15emergency care or authorization for care.
AB673,10,20 16(4) Standards for appointment scheduling. A managed care plan shall
17establish standards for reasonable waiting times for obtaining appointments for
18health care services, except for emergency care. The standards shall include
19scheduling guidelines based on the type of health care service for which an
20appointment is being made.
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