AB927: Bill Text

LRB-4987/2

PJK:jlg:hmh

1997 - 1998 LEGISLATURE

1997 Assembly BILL 927

March 17, 1998 - Introduced by Representatives Ladwig, R. Potter, Owens, Wasserman, Baldwin, Black, Bock, Brandemuehl, Carpenter, Dobyns, Gunderson, Hahn, Hebl, Johnsrud, J. Lehman, Linton, Musser, Notestein, Olsen, Ott, Plale, Porter, Robson, Ryba, Seratti and Vander Loop, cosponsored by Senators Roessler, Wirch, Rosenzweig, C. Potter, Schultz, Welch, Drzewiecki, Darling and Panzer. Referred to Committee on Managed Care.

AB927,2,3 An Act to repeal 609.01 (1); to amend 51.20 (7) (am), 601.42 (1g) (d), 609.01 (2), 609.01 (3), 609.01 (4), 609.01 (7), 609.05 (1), 609.05 (2), 609.05 (3), 609.10 (1) (a), 609.15 (1) (intro.), 609.15 (1) (a), 609.15 (1) (b), 609.15 (2) (a), 609.15 (2) (b), 609.17, 609.20 (intro.), 609.20 (1), 609.20 (2), 609.20 (4), 609.65 (1) (intro.), 609.65 (1) (a), 609.65 (1) (b) (intro.), 609.65 (1) (b) 1., 609.65 (1) (b) 2., 609.65 (2), 609.65 (3), 609.655 (1) (a) 1., 609.655 (1) (a) 2., 609.655 (2), 609.655 (3) (intro.), 609.655 (3) (a), 609.655 (3) (b) (intro.), 609.655 (3) (b) 1., 609.655 (4) (a), 609.655 (4) (b), 609.655 (5) (a), 609.655 (5) (b), 609.70, 609.75, 609.77, 609.78, 609.79, 609.80, 609.81, 609.91 (1) (intro.), 609.91 (1) (b) 2., 609.91 (1) (b) 3., 609.91 (1m), 609.91 (2), 609.91 (3), 609.91 (4) (intro.), 609.91 (4) (a), 609.91 (4) (b), 609.91 (4) (c), 609.91 (4) (cm), 609.91 (4) (d), 609.92 (5), 609.94 (1) (b), 645.69 (1), 645.69 (2), 646.31 (1) (d) 8. and 646.31 (1) (d) 9.; to repeal and recreate 40.51 (12), chapter 609 (title), 609.01 (1d), 609.01 (5) and 609.01 (6); and to create 40.51 (13), 609.01 (1c), 609.01 (1g), 609.01 (1p), 609.01 (3c), 609.01 (3m), 609.01 (3r), 609.01 (4m), 609.22, 609.24, 609.26, 609.28, 609.30, 609.32, 609.34, 609.36 and 609.38 of the statutes; relating to: requirements for managed care plans and granting rule-making authority.

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. Those requirements address when an employer must offer a standard plan in addition to a health maintenance organization or preferred provider plan; coverage under a health maintenance organization for certain services for a child who is away at school; reporting disciplinary action taken against a participating provider of a health maintenance organization, preferred provider plan or limited service health organization; and a grievance procedure that all health maintenance organizations, preferred provider plans and limited service health organizations must establish. This bill provides for additional requirements for managed care plans, which are defined in the bill as health benefit plans that create incentives for plan enrollees to use providers that are managed, owned, under contract with or employed by the plan. Under the bill, health maintenance organizations and preferred provider plans are managed care plans, but limited service health organizations are not.

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 providers to meet the anticipated needs of its enrollees, with respect to covered benefits. 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. If a managed care plan covers emergency care, it may not require prior authorization for such care. In addition, a managed care plan must cover emergency care for a dependent child who is attending school away from home, regardless of where the emergency care is provided.

A managed care plan must permit an enrollee to choose a primary provider from a list of participating providers that is updated on an ongoing basis. 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.

With certain exceptions, a managed care plan must provide coverage for the services of a provider that the plan represented in marketing materials would be a participating provider, regardless of whether the provider is a participating provider at the time that the services are rendered. The coverage is required until the end of the plan year for which the plan represented that the provider would be a participating provider. If the provider is a specialist physician who is providing a course of treatment to an enrollee when the provider's participation in the plan terminates, the plan must provide coverage for the provider's services only until the course of treatment is completed or for 90 days after the provider's participation ends, whichever is sooner.

If a managed care plan provides coverage for prescribed drugs or devices, the plan may not deny coverage for a prescribed drug or device that is approved by the federal food and drug administration solely on the basis that the drug or device is being used for a purpose for which it has not been approved by the federal food and drug administration. A managed care plan that covers only certain prescribed drugs or devices must cover any other prescribed drug or device whenever the drug or device is medically necessary.

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. The plan must make a coverage decision within 5 days after receiving a request for prior authorization of an experimental procedure. Whenever coverage for experimental treatment is denied, the plan must provide the enrollee with a denial letter that informs the enrollee of who made the coverage decision, the reasons for the denial and the enrollee's right to appeal the decision.

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 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.

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:

AB927, s. 1 Section 1. 40.51 (12) of the statutes is repealed and recreated to read:

AB927,3,4 40.51 (12) Every managed care plan, as defined in s. 609.01 (3c), and every limited service health organization, as defined in s. 609.01 (3), that is offered by the state under sub. (6) shall comply with ch. 609.

AB927, s. 2 Section 2. 40.51 (13) of the statutes is created to read:

AB927,4,3 40.51 (13) Every managed care plan, as defined in s. 609.01 (3c), and every limited service health organization, as defined in s. 609.01 (3), that is offered by the group insurance board under sub. (7) shall comply with ch. 609.

AB927, s. 3 Section 3. 51.20 (7) (am) of the statutes is amended to read:

AB927,4,11 51.20 (7) (am) A subject individual may not be examined, evaluated or treated for a nervous or mental disorder pursuant to a court order under this subsection unless the court first attempts to determine whether the person is an enrolled participant enrollee of a health maintenance organization, limited service health organization or preferred provider plan, as defined in s. 609.01, and, if so, notifies the organization or plan that the subject individual is in need of examination, evaluation or treatment for a nervous or mental disorder.

AB927, s. 4 Section 4. 601.42 (1g) (d) of the statutes is amended to read:

AB927,4,18 601.42 (1g) (d) Statements, reports, answers to questionnaires or other information, or reports, audits or certification from a certified public accountant or an actuary approved by the commissioner, relating to the extent liabilities of a health maintenance organization insurer are or will be covered liabilities, as defined in s. 609.01 (1) liabilities for health care costs for which an enrollee or policyholder of the health maintenance organization is not liable to any person under s. 609.91.

AB927, s. 5 Section 5. Chapter 609 (title) of the statutes is repealed and recreated to read:

AB927,4,21 Chapter 609 managed care plans

AB927, s. 6 Section 6. 609.01 (1) of the statutes is repealed.

AB927, s. 7 Section 7. 609.01 (1c) of the statutes is created to read:

AB927,5,3 609.01 (1c) "Emergency medical condition" means a medical condition that manifests itself by acute symptoms of sufficient severity, including severe pain, to lead a prudent layperson who possesses an average knowledge of health and medicine to reasonably conclude that a lack of immediate medical attention might result in any of the following:

AB927,5,4 (a) Serious jeopardy to the person's health.

AB927,5,5 (b) Serious impairment to the person's bodily functions.

AB927,5,6 (c) Serious dysfunction of any of the person's bodily organs or parts.

AB927, s. 8 Section 8. 609.01 (1d) of the statutes is repealed and recreated to read:

AB927,5,10 609.01 (1d) "Enrollee" means, with respect to a managed care plan or limited service health organization, a person who is entitled to receive health care services under the plan.

AB927, s. 9 Section 9. 609.01 (1g) of the statutes is created to read:

AB927,5,13 609.01 (1g) (a) Except as provided in par. (b), "health benefit plan" means any hospital or medical policy or certificate.

AB927,5,14 (b) "Health benefit plan" does not include any of the following:

AB927,5,16 1. Coverage that is only accident or disability income insurance, or any combination of the 2 types.

AB927,5,17 2. Coverage issued as a supplement to liability insurance.

AB927,5,19 3. Liability insurance, including general liability insurance and automobile liability insurance.

AB927,5,20 4. Worker's compensation or similar insurance.

AB927,5,21 5. Automobile medical payment insurance.

AB927,5,22 6. Credit-only insurance.

AB927,5,23 7. Coverage for on-site medical clinics.

AB927,6,3 8. Other similar insurance coverage, as specified in regulations issued by the federal department of health and human services, under which benefits for medical care are secondary or incidental to other insurance benefits.

AB927,6,9 9. If provided under a separate policy, certificate or contract of insurance, or if otherwise not an integral part of the policy, certificate or contract of insurance: limited-scope dental or vision benefits; benefits for long-term care, nursing home care, home health care, community-based care, or any combination of those benefits; and such other similar, limited benefits as are specified in regulations issued by the federal department of health and human services under section 2791 of P.L. 104-191.

AB927,6,11 10. Hospital indemnity or other fixed indemnity insurance or coverage only for a specified disease or illness, if all of the following apply:

AB927,6,13 a. The benefits are provided under a separate policy, certificate or contract of insurance.

AB927,6,16 b. There is no coordination between the provision of such benefits and any exclusion of benefits under any group health plan maintained by the same plan sponsor.

AB927,6,19 c. Such benefits are paid with respect to an event without regard to whether benefits are provided with respect to such an event under any group health plan maintained by the same plan sponsor.

AB927,6,20 11. Other insurance exempted by rule of the commissioner.

AB927, s. 10 Section 10. 609.01 (1p) of the statutes is created to read:

AB927,6,25 609.01 (1p) "Health care professional" means any individual licensed, registered, permitted or certified by the department of health and family services or the department of regulation and licensing to provide health care services, items or supplies in this state.

AB927, s. 11 Section 11. 609.01 (2) of the statutes is amended to read:

AB927,7,7 609.01 (2) "Health maintenance organization" means a health care plan offered by an organization established under ch. 185, 611, 613 or 614 or issued a certificate of authority under ch. 618 that makes available to its enrolled participants enrollees, in consideration for predetermined periodic fixed payments, comprehensive health care services performed by providers selected by the organization participating in the plan.

AB927, s. 12 Section 12. 609.01 (3) of the statutes is amended to read:

AB927,7,14 609.01 (3) "Limited service health organization" means a health care plan offered by an organization established under ch. 185, 611, 613 or 614 or issued a certificate of authority under ch. 618 that makes available to its enrolled participants enrollees, in consideration for predetermined periodic fixed payments, a limited range of health care services performed by providers selected by the organization participating in the plan.

AB927, s. 13 Section 13. 609.01 (3c) of the statutes is created to read:

AB927,7,21 609.01 (3c) "Managed care plan" means a health benefit plan that requires an enrollee of the health benefit plan, or creates incentives, including financial incentives, for an enrollee of the health benefit plan, to use providers that are managed, owned, under contract with or employed by the insurer offering the health benefit plan. The term includes a health maintenance organization and a preferred provider plan, but does not include a limited service health organization.

AB927, s. 14 Section 14. 609.01 (3m) of the statutes is created to read:

AB927,8,2 609.01 (3m) "Participating" means, with respect to a physician or other provider, under contract with a managed care plan or limited service health organization to provide health care services, items or supplies to enrollees of the plan.

AB927, s. 15 Section 15. 609.01 (3r) of the statutes is created to read:

AB927,8,4 609.01 (3r) "Physician" has the meaning given in s. 448.01 (5).

AB927, s. 16 Section 16. 609.01 (4) of the statutes is amended to read:

AB927,8,11 609.01 (4) "Preferred provider plan" means a health care plan offered by an organization established under ch. 185, 611, 613 or 614 or issued a certificate of authority under ch. 618 that makes available to its enrolled participants enrollees, for consideration other than predetermined periodic fixed payments, either comprehensive health care services or a limited range of health care services performed by providers selected by the organization participating in the plan.

AB927, s. 17 Section 17. 609.01 (4m) of the statutes is created to read:

AB927,8,14 609.01 (4m) "Primary care physician" means a physician specializing in family medical practice, general internal medicine, obstetrics and gynecology or pediatrics.

AB927, s. 18 Section 18. 609.01 (5) of the statutes is repealed and recreated to read:

AB927,8,17 609.01 (5) "Primary provider" means a participating health care professional who coordinates, supervises and may provide ongoing care to an enrollee.

AB927, s. 19 Section 19. 609.01 (6) of the statutes is repealed and recreated to read:

AB927,8,20 609.01 (6) "Specialist physician" means a physician who is not a primary care physician.

AB927, s. 20 Section 20. 609.01 (7) of the statutes is amended to read:

AB927,8,23 609.01 (7) "Standard plan" means a health care plan other than a health maintenance organization or a preferred provider that is not a managed care plan.

AB927, s. 21 Section 21. 609.05 (1) of the statutes is amended to read:

AB927,9,4 609.05 (1) Except as provided in subs. (2) and (3), a health maintenance organization, limited service health organization or preferred provider managed care plan shall permit its enrolled participants enrollees to choose freely among selected participating providers.

AB927, s. 22 Section 22. 609.05 (2) of the statutes is amended to read:

AB927,9,8 609.05 (2) A Subject to s. 609.22 (4), a health care plan under sub. (1) may require an enrolled participant enrollee to designate a primary provider and to obtain health care services from the primary provider when reasonably possible.