SB380: Bill Text

LRB-3739/1

PJK:kaf:ijs

1997 - 1998 LEGISLATURE

1997 Senate BILL 380

December 17, 1997 - Introduced by Senators Roessler, Wirch, Rosenzweig, C. Potter, Schultz, Wineke, Welch, Clausing, Drzewiecki, Darling and Panzer, cosponsored by Representatives Ladwig, Wasserman, R. Potter, Urban, Johnsrud, Bock, Gunderson, Black, Brandemuehl, Robson, Ward, Linton, Kaufert, Travis, Seratti, Baldwin, Lorge, Baumgart, Dobyns, Hebl, Hahn, J. Lehman, Musser, Notestein, Ourada, Ryba, Owens and Vander Loop. Referred to Committee on Health, Human Services, Aging, Corrections, Veterans and Military Affairs.

SB380,1,14 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 (2), 609.655 (5) (a), 609.655 (5) (b), 609.70, 609.75, 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), 609.01 (1d), 609.01 (5) and 609.01 (6); and to create 40.51 (13), 609.01 (1c), 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 (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:

SB380, s. 1 Section 1. 40.51 (12) of the statutes is repealed and recreated to read:

SB380,3,3 40.51 (12) Every managed care plan, as defined in s. 609.01 (3c), that is offered by the state under sub. (6) shall comply with ch. 609.

SB380, s. 2 Section 2. 40.51 (13) of the statutes is created to read:

SB380,3,6 40.51 (13) Every managed care plan, as defined in s. 609.01 (3c), that is offered by the group insurance board under sub. (7) shall comply with ch. 609.

SB380, s. 3 Section 3. 51.20 (7) (am) of the statutes is amended to read:

SB380,3,14 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 (4), 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.

SB380, s. 4 Section 4. 601.42 (1g) (d) of the statutes is amended to read:

SB380,4,4 601.42 (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 insurer is not liable to any person under s. 609.91.

SB380, s. 5 Section 5. 609.01 (1) of the statutes is repealed.

SB380, s. 6 Section 6. 609.01 (1c) of the statutes is created to read:

SB380,4,11 609.01 (1c) "Emergency medical condition" means a medical condition of a person that has a sudden onset and that manifests itself by 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:

SB380,4,12 (a) Serious jeopardy to the person's health.

SB380,4,13 (b) Serious impairment to the person's bodily functions.

SB380,4,14 (c) Serious dysfunction of any of the person's bodily organs or parts.

SB380, s. 7 Section 7. 609.01 (1d) of the statutes is repealed and recreated to read:

SB380,4,17 609.01 (1d) "Enrollee" means, with respect to a managed care plan, a person who is entitled to receive health care services under the plan.

SB380, s. 8 Section 8. 609.01 (1p) of the statutes is created to read:

SB380,4,22 609.01 (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.

SB380, s. 9 Section 9. 609.01 (2) of the statutes is amended to read:

SB380,5,4 609.01 (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.

SB380, s. 10 Section 10. 609.01 (3) of the statutes is amended to read:

SB380,5,11 609.01 (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.

SB380, s. 11 Section 11. 609.01 (3c) of the statutes is created to read:

SB380,5,14 609.01 (3c) "Managed care plan" means a health maintenance organization, limited service health organization or preferred provider plan.

SB380, s. 12 Section 12. 609.01 (3m) of the statutes is created to read:

SB380,5,18 609.01 (3m) "Participating" means, with respect to a physician or other provider, under contract with a managed care plan to provide health care services, items or supplies to enrollees of the plan.

SB380, s. 13 Section 13. 609.01 (3r) of the statutes is created to read:

SB380,5,20 609.01 (3r) "Physician" has the meaning given in s. 448.01 (5).

SB380, s. 14 Section 14. 609.01 (4) of the statutes is amended to read:

SB380,6,2 609.01 (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.

SB380, s. 15 Section 15. 609.01 (4m) of the statutes is created to read:

SB380,6,5 609.01 (4m) "Primary care physician" means a physician specializing in family medical practice, general internal medicine, obstetrics and gynecology or pediatrics.