AB518: Bill Text

LRB-2313/3

PJK:wlj:mrc

1999 - 2000 LEGISLATURE

1999 Assembly BILL 518

October 5, 1999 - Introduced by Representatives Underheim, F. Lasee, Musser, Kelso, Urban, Ladwig, Albers, Kaufert and Kedzie, cosponsored by Senators Breske, Rosenzweig, Roessler, Darling, Schultz and Drzewiecki. Referred to Committee on Insurance.

AB518,1,9 An Act to renumber 609.15 (1) (c), 609.15 (2) (c), 609.15 (2) (d) and 609.15 (2) (e); to renumber and amend 609.15 (1) (intro.), 609.15 (1) (a), 609.15 (1) (b), 609.15 (2) (intro.), 609.15 (2) (a) and 609.15 (2) (b); to amend 40.51 (8), 40.51 (8m), 600.01 (2) (b) and 601.42 (4); and to create 111.91 (2) (r), 601.31 (1) (Lp), 601.31 (1) (Lr), 632.83 and 632.835 of the statutes; relating to: requiring all insurers to establish internal grievance procedures, independent review of certain coverage determinations made by health benefit plans, granting rule-making authority and providing an exemption from emergency rule procedures.

Analysis by the Legislative Reference Bureau

Under current law, every managed care plan is required to have an internal grievance procedure under which an enrollee may submit a written grievance and a grievance panel must investigate the grievance and, if appropriate, take corrective action. This bill requires every health benefit plan to have such an internal grievance procedure. In addition, the bill requires every health benefit plan, including managed care plans and plans covering state and municipal employes, to have an independent review procedure for review of certain decisions under the health benefit plan's internal grievance procedure that are adverse to insureds. The decision must relate to the plan's denial of treatment or payment for treatment that the plan determined was experimental or to the plan's denial, reduction or termination of a health care service or payment for a health care service, including admission to or continued stay in a health care facility, on the basis that the health care service did not meet the plan's requirements for medical necessity or appropriateness, health care setting or level of care or effectiveness. In order to be eligible for independent review, the amount of the reduction or the value of the denied or terminated service must be at least $500, which may be increased or decreased by the commissioner of insurance (commissioner) based on changes in the consumer price index. Generally, an insured must request independent review within four months after receiving notice of the adverse decision on his or her grievance under the internal grievance procedure.

Under the bill, an independent review may be conducted only by an independent review organization that has been certified by the commissioner. A certified independent review organization must be recertified every two years to continue to conduct independent reviews. The commissioner may revoke, suspend or limit the certification of an independent review organization for various reasons specified in the bill. Clinical peer reviewers, who conduct the reviews on behalf of independent review organizations, must be health care providers who satisfy specified criteria, including having expertise through actual clinical experience in treating the condition that is the subject of the review. Every insurer that issues a health benefit plan must contract with one or more certified independent review organizations for the purpose of conducting the independent reviews in which the plan is involved. A contract must be at least two years long, and an insurer must inform the commissioner if such a contract is not renewed and of the reasons for the nonrenewal.

To request an independent review, an insured must provide written notice of the request to the health benefit plan, which must inform the commissioner of the request and inform the insured of the name and address of the independent review organization that will be conducting the independent review. The insured must pay $50 to the independent review organization, which is refunded to the insured if he or she prevails, in whole or in part, in the independent review. In addition, the plan must pay a fee to the independent review organization for each review.

Within three days after receiving the notice from the insured, the health benefit plan must send to the independent review organization all of the information that it used in making the determination in the internal grievance procedure. No later than five days after receiving that information, the independent review organization may request more information from either or both parties, who have five more days in which to supply the requested information. The independent review organization may consider, however, any other relevant information, and any information that a party provides to the independent review organization must also be provided to the other party. Within 30 days after the expiration of all relevant time limits in the matter, the independent review organization must make a determination on the basis of the written information submitted by the parties. If an expedited review is required because of the enrollee's medical condition, all specified time limits are shortened, and the independent review organization must make a determination within 72 hours after the expiration of all relevant time limits in the matter. The bill specifies certain review standards for independent review organizations, including under what circumstances treatment that was considered experimental by the health benefit plan must be covered. The decision at the conclusion of an independent review, which is binding on the insured and the health benefit plan, must be in writing and served on both parties.

The bill contains prohibitions aimed at avoiding conflicts of interest for independent review organizations, such as prohibiting an independent review organization from owning, controlling or being a subsidiary of a health benefit plan or an association of health benefit plans. The bill also provides independent review organizations and clinical peer reviewers with immunity from liability for decisions made in independent reviews.

The bill requires the commissioner to promulgate rules relating to such topics as the application procedures and standards for certification and recertification of independent review organizations, additional procedures and processes that independent review organizations must use in independent reviews, standards for the practices and conduct of independent review organizations and additional standards related to conflicts of interest.

Finally, the bill requires the commissioner to determine when a sufficient number of independent review organizations have been certified to effectively provide the independent reviews required under the bill. When the commissioner makes that determination, the commissioner must publish a notice in the Wisconsin Administrative Register that specifies a date that is six months after the determination is made. That date is the date on which the independent review procedure must begin operating.

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:

AB518, s. 1 Section 1. 40.51 (8) of the statutes is amended to read:

AB518,3,5 40.51 (8) Every health care coverage plan offered by the state under sub. (6) shall comply with ss. 631.89, 631.90, 631.93 (2), 632.72 (2), 632.746 (1) to (8) and (10), 632.747, 632.748, 632.83, 632.835, 632.85, 632.853, 632.855, 632.87 (3) to (5), 632.895 (5m) and (8) to (13) and 632.896.

AB518, s. 2 Section 2. 40.51 (8m) of the statutes is amended to read:

AB518,4,3 40.51 (8m) Every health care coverage plan offered by the group insurance board under sub. (7) shall comply with ss. 632.746 (1) to (8) and (10), 632.747, 632.748, 632.83, 632.835, 632.85, 632.853, 632.855 and 632.895 (11) to (13).

AB518, s. 3 Section 3. 111.91 (2) (r) of the statutes is created to read:

AB518,4,7 111.91 (2) (r) The requirements related to internal grievance procedures under s. 632.83 and independent review of certain health benefit plan determinations under s. 632.835.

AB518, s. 4 Section 4. 600.01 (2) (b) of the statutes is amended to read:

AB518,4,10 600.01 (2) (b) Group or blanket insurance described in sub. (1) (b) 3. and 4. is not exempt from ss. 632.745 to 632.749, 632.83 or 632.835 or ch. 633 or 635.

AB518, s. 5 Section 5. 601.31 (1) (Lp) of the statutes is created to read:

AB518,4,13 601.31 (1) (Lp) For certifying as an independent review organization under s. 632.835, $400.

AB518, s. 6 Section 6. 601.31 (1) (Lr) of the statutes is created to read:

AB518,4,16 601.31 (1) (Lr) For each biennial recertification as an independent review organization under s. 632.835, $100.

AB518, s. 7 Section 7. 601.42 (4) of the statutes is amended to read:

AB518,5,3 601.42 (4) Replies. Any officer, manager or general agent of any insurer authorized to do or doing an insurance business in this state, any person controlling or having a contract under which the person has a right to control such an insurer, whether exclusively or otherwise, any person with executive authority over or in charge of any segment of such an insurer's affairs, any individual practice association or officer, director or manager of an individual practice association, any insurance agent or other person licensed under chs. 600 to 646, any provider of services under a continuing care contract, as defined in s. 647.01 (2), any independent review organization certified under s. 632.835 (4) or any health care provider, as defined in s. 655.001 (8), shall reply promptly in writing or in other designated form, to any written inquiry from the commissioner requesting a reply.

AB518, s. 8 Section 8. 609.15 (1) (intro.) of the statutes is renumbered 609.15 and amended to read:

AB518,5,8 609.15 Grievance procedure. Each limited service health organization, preferred provider plan and managed care plan shall do all of the following: establish and use an internal grievance procedure as provided in s. 632.83.

AB518, s. 9 Section 9. 609.15 (1) (a) of the statutes is renumbered 632.83 (2) (a) and amended to read:

AB518,5,14 632.83 (2) (a) Establish and use an internal grievance procedure that is approved by the commissioner and that complies with sub. (2) (3) for the resolution of enrollees' insureds' grievances with the limited service health organization, preferred provider plan or managed care health benefit plan.

AB518, s. 10 Section 10. 609.15 (1) (b) of the statutes is renumbered 632.83 (2) (b) and amended to read:

AB518,5,18 632.83 (2) (b) Provide enrollees insureds with complete and understandable information describing the internal grievance procedure under par. (a).

AB518, s. 11 Section 11. 609.15 (1) (c) of the statutes is renumbered 632.83 (2) (c).

AB518, s. 12 Section 12. 609.15 (2) (intro.) of the statutes is renumbered 632.83 (3) (intro.) and amended to read:

AB518,5,23 632.83 (3) (intro.) The internal grievance procedure established under sub. (1) (2) (a) shall include all of the following elements:

AB518, s. 13 Section 13. 609.15 (2) (a) of the statutes is renumbered 632.83 (3) (a) and amended to read:

AB518,6,2 632.83 (3) (a) The opportunity for an enrollee insured to submit a written grievance in any form.

AB518, s. 14 Section 14. 609.15 (2) (b) of the statutes is renumbered 632.83 (3) (b) and amended to read:

AB518,6,8 632.83 (3) (b) Establishment of a grievance panel for the investigation of each grievance submitted under par. (a), consisting of at least one individual authorized to take corrective action on the grievance and at least one enrollee insured other than the grievant, if an enrollee insured is available to serve on the grievance panel.

AB518, s. 15 Section 15. 609.15 (2) (c) of the statutes is renumbered 632.83 (3) (c).

AB518, s. 16 Section 16. 609.15 (2) (d) of the statutes is renumbered 632.83 (3) (d).

AB518, s. 17 Section 17. 609.15 (2) (e) of the statutes is renumbered 632.83 (3) (e).

AB518, s. 18 Section 18. 632.83 of the statutes is created to read:

AB518,6,15 632.83 Internal grievance procedure. (1) In this section, "health benefit plan" has the meaning given in s. 632.745 (11), except that "health benefit plan" includes the coverage specified in s. 632.745 (11) (b) 10.

AB518,6,16 (2) Each health benefit plan shall do all of the following: