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 1Section 1. 40.51 (8) of the statutes is amended to read:
AB518,3,52 40.51 (8) Every health care coverage plan offered by the state under sub. (6)
3shall comply with ss. 631.89, 631.90, 631.93 (2), 632.72 (2), 632.746 (1) to (8) and (10),
4632.747, 632.748, 632.83, 632.835, 632.85, 632.853, 632.855, 632.87 (3) to (5),
5632.895 (5m) and (8) to (13) and 632.896.
AB518, s. 2 6Section 2. 40.51 (8m) of the statutes is amended to read:
AB518,4,3
140.51 (8m) Every health care coverage plan offered by the group insurance
2board under sub. (7) shall comply with ss. 632.746 (1) to (8) and (10), 632.747,
3632.748, 632.83, 632.835, 632.85, 632.853, 632.855 and 632.895 (11) to (13).
AB518, s. 3 4Section 3. 111.91 (2) (r) of the statutes is created to read:
AB518,4,75 111.91 (2) (r) The requirements related to internal grievance procedures under
6s. 632.83 and independent review of certain health benefit plan determinations
7under s. 632.835.
AB518, s. 4 8Section 4. 600.01 (2) (b) of the statutes is amended to read:
AB518,4,109 600.01 (2) (b) Group or blanket insurance described in sub. (1) (b) 3. and 4. is
10not exempt from ss. 632.745 to 632.749, 632.83 or 632.835 or ch. 633 or 635.
AB518, s. 5 11Section 5. 601.31 (1) (Lp) of the statutes is created to read:
AB518,4,1312 601.31 (1) (Lp) For certifying as an independent review organization under s.
13632.835, $400.
AB518, s. 6 14Section 6. 601.31 (1) (Lr) of the statutes is created to read:
AB518,4,1615 601.31 (1) (Lr) For each biennial recertification as an independent review
16organization under s. 632.835, $100.
AB518, s. 7 17Section 7. 601.42 (4) of the statutes is amended to read:
AB518,5,318 601.42 (4) Replies. Any officer, manager or general agent of any insurer
19authorized to do or doing an insurance business in this state, any person controlling
20or having a contract under which the person has a right to control such an insurer,
21whether exclusively or otherwise, any person with executive authority over or in
22charge of any segment of such an insurer's affairs, any individual practice
23association or officer, director or manager of an individual practice association, any
24insurance agent or other person licensed under chs. 600 to 646, any provider of
25services under a continuing care contract, as defined in s. 647.01 (2), any

1independent review organization certified under s. 632.835 (4)
or any health care
2provider, as defined in s. 655.001 (8), shall reply promptly in writing or in other
3designated form, to any written inquiry from the commissioner requesting a reply.
AB518, s. 8 4Section 8. 609.15 (1) (intro.) of the statutes is renumbered 609.15 and
5amended to read:
AB518,5,8 6609.15 Grievance procedure. Each limited service health organization,
7preferred provider plan and managed care plan shall do all of the following: establish
8and use an internal grievance procedure as provided in s. 632.83.
AB518, s. 9 9Section 9. 609.15 (1) (a) of the statutes is renumbered 632.83 (2) (a) and
10amended to read:
AB518,5,1411 632.83 (2) (a) Establish and use an internal grievance procedure that is
12approved by the commissioner and that complies with sub. (2) (3) for the resolution
13of enrollees' insureds' grievances with the limited service health organization,
14preferred provider plan or managed care
health benefit plan.
AB518, s. 10 15Section 10. 609.15 (1) (b) of the statutes is renumbered 632.83 (2) (b) and
16amended to read:
AB518,5,1817 632.83 (2) (b) Provide enrollees insureds with complete and understandable
18information describing the internal grievance procedure under par. (a).
AB518, s. 11 19Section 11. 609.15 (1) (c) of the statutes is renumbered 632.83 (2) (c).
AB518, s. 12 20Section 12. 609.15 (2) (intro.) of the statutes is renumbered 632.83 (3) (intro.)
21and amended to read:
AB518,5,2322 632.83 (3) (intro.) The internal grievance procedure established under sub. (1)
23(2) (a) shall include all of the following elements:
AB518, s. 13 24Section 13. 609.15 (2) (a) of the statutes is renumbered 632.83 (3) (a) and
25amended to read:
AB518,6,2
1632.83 (3) (a) The opportunity for an enrollee insured to submit a written
2grievance in any form.
AB518, s. 14 3Section 14. 609.15 (2) (b) of the statutes is renumbered 632.83 (3) (b) and
4amended to read:
AB518,6,85 632.83 (3) (b) Establishment of a grievance panel for the investigation of each
6grievance submitted under par. (a), consisting of at least one individual authorized
7to take corrective action on the grievance and at least one enrollee insured other than
8the grievant, if an enrollee insured is available to serve on the grievance panel.
AB518, s. 15 9Section 15. 609.15 (2) (c) of the statutes is renumbered 632.83 (3) (c).
AB518, s. 16 10Section 16. 609.15 (2) (d) of the statutes is renumbered 632.83 (3) (d).
AB518, s. 17 11Section 17. 609.15 (2) (e) of the statutes is renumbered 632.83 (3) (e).
AB518, s. 18 12Section 18. 632.83 of the statutes is created to read:
AB518,6,15 13632.83 Internal grievance procedure. (1) In this section, "health benefit
14plan" has the meaning given in s. 632.745 (11), except that "health benefit plan"
15includes the coverage specified in s. 632.745 (11) (b) 10.
AB518,6,16 16(2) Each health benefit plan shall do all of the following:
AB518, s. 19 17Section 19. 632.835 of the statutes is created to read:
AB518,6,19 18632.835 Independent review of adverse and experimental treatment
19determinations.
(1) Definitions. In this section:
AB518,6,2120 (a) "Adverse determination" means a determination by or on behalf of a health
21benefit plan to which all of the following apply:
AB518,6,2322 1. An admission to a health care facility, the availability of care, the continued
23stay or another health care service that is a covered benefit has been reviewed.
AB518,7,3
12. Based on the information provided, the health care service under subd. 1.
2does not meet the health benefit plan's requirements for medical necessity,
3appropriateness, health care setting, level of care or effectiveness.
AB518,7,64 3. Based on the information provided, the health benefit plan reduced, denied
5or terminated the health care service under subd. 1. or payment for the health care
6service under subd. 1.
AB518,7,97 4. Subject to sub. (5) (c), the amount of the reduction or the value of the denied
8or terminated service or payment exceeds $500, excluding deductibles and
9copayments.
AB518,7,1110 (b) "Experimental treatment determination" means a determination by or on
11behalf of a health benefit plan to which all of the following apply:
AB518,7,1212 1. A proposed treatment has been reviewed.
AB518,7,1413 2. Based on the information provided, the treatment under subd. 1. is
14determined to be experimental under the terms of the health benefit plan.
AB518,7,1615 3. Based on the information provided, the health benefit plan denied the
16treatment under subd. 1. or payment for the treatment under subd. 1.
AB518,7,1817 4. Subject to sub. (5) (c), the value of the denied treatment or payment exceeds
18$500, excluding deductibles and copayments.
AB518,7,2019 (c) "Health benefit plan" has the meaning given in s. 632.745 (11), except that
20"health benefit plan" includes the coverage specified in s. 632.745 (11) (b) 10.
AB518,7,25 21(2) Review requirements; who may conduct. (a) Every health benefit plan
22shall establish an independent review procedure whereby an insured under the
23health benefit plan, or his or her authorized representative, may request and obtain
24an independent review of an adverse determination or an experimental treatment
25determination made with respect to the insured.
AB518,8,10
1(b) An independent review under this section may be conducted only by an
2independent review organization certified under sub. (4). Every insurer issuing a
3health benefit plan shall contract with one or more independent review
4organizations certified under sub. (4) for the purpose of conducting independent
5reviews of adverse determinations and experimental treatment determinations
6made by or on behalf of the health benefit plan. The term of a contract with an
7independent review organization may not be less than 2 years. If an insurer fails to
8renew the contract of an independent review organization at the end of the contract
9term, the insurer shall inform the commissioner that the contract has not been
10renewed and of the reasons for the nonrenewal.
AB518,8,1711 (c) An insured must exhaust the health benefit plan's internal grievance
12procedure before the insured may request an independent review under this section,
13unless the delay will result for the insured in serious injury or impairment or a
14life-threatening condition, as determined by the insured's treating health care
15provider. Except as provided in sub. (9), an insured must request an independent
16review as provided in sub. (3) (a) within 4 months after the insured receives notice
17of the disposition of his or her grievance under s. 632.83 (3) (d).
AB518,8,2218 (d) Whenever an adverse determination or an experimental treatment
19determination is made, the health benefit plan involved in the determination shall
20advise the insured of the insured's right to obtain the independent review required
21under this section, how to request the review and the time within which the review
22must be requested.
AB518,9,10 23(3) Procedure. (a) To request an independent review, an insured or his or her
24authorized representative shall provide timely written notice of the request for
25independent review to the health benefit plan that made or on whose behalf was

1made the adverse or experimental treatment determination. The health benefit plan
2shall immediately notify the commissioner of the request for independent review and
3notify the insured of the name and address of the independent review organization
4that will be conducting the review. The insured or his or her authorized
5representative must pay a $50 fee to the independent review organization. If the
6insured prevails on the review, in whole or in part, the entire amount paid by the
7insured or his or her authorized representative shall be refunded by the health
8benefit plan to the insured or his or her authorized representative. For each
9independent review in which it is involved, a health benefit plan shall pay a fee to
10the independent review organization.
AB518,9,1311 (b) Within 3 business days after receiving written notice of a request for
12independent review under par. (a), the health benefit plan shall submit to the
13independent review organization copies of all of the following:
AB518,9,1514 1. Any information submitted to the health benefit plan by the insured in
15support of the insured's position in the internal grievance under s. 632.83.
AB518,9,1616 2. The contract provisions or evidence of coverage of the health benefit plan.
AB518,9,1817 3. Any other relevant documents or information used by the health benefit plan
18in the internal grievance determination under s. 632.83.
AB518,9,2419 (c) Within 5 business days after receiving the information under par. (b), the
20independent review organization shall request any additional information that it
21requires for the review from the insured or the health benefit plan. Within 5 business
22days after receiving a request for additional information, the insured or health
23benefit plan shall submit the information or an explanation of why the information
24is not being submitted.
AB518,10,7
1(d) In addition to the information under pars. (b) and (c), the independent
2review organization may accept for consideration any typed or printed, verifiable
3medical or scientific evidence that the independent review organization determines
4is relevant, regardless of whether the evidence has been submitted for consideration
5at any time previously. The health benefit plan and the insured shall submit to the
6other party to the independent review any information submitted to the independent
7review organization under pars. (b) to (d).
AB518,10,118 (e) An independent review under this section may not include appearances by
9the insured or his or her authorized representative, any person representing the
10health benefit plan or any witness on behalf of either the insured or the health benefit
11plan.
AB518,10,1912 (f) The independent review organization shall, within 30 business days after
13the expiration of all time limits that apply in the matter, make a decision on the basis
14of the documents and information submitted under this subsection. The decision
15shall be in writing, signed on behalf of the independent review organization and
16served by personal delivery or by mailing a copy to the insured or his or her
17authorized representative and to the health benefit plan. A decision of an
18independent review organization is binding on the insured and the health benefit
19plan.
AB518,10,2320 (g) If, in the judgment of the insured's treating health care provider, the adverse
21or experimental treatment determination relates to a serious injury or impairment
22or a life-threatening condition, the procedure outlined in pars. (b) to (f) shall be
23followed with the following differences:
AB518,11,3
11. The health benefit plan shall submit the information under par. (b) within
2one day after receiving the notice of the request for independent review under par.
3(a).
AB518,11,64 2. The independent review organization shall request any additional
5information under par. (c) within 2 business days after receiving the information
6under par. (b).
AB518,11,97 3. The insured or health benefit plan shall, within 2 days after receiving a
8request under par. (c), submit any information requested or an explanation of why
9the information is not being submitted.
AB518,11,1210 4. The independent review organization shall make its decision under par. (f)
11within 72 hours after the expiration of the time limits under this paragraph that
12apply in the matter.
AB518,11,15 13(3m) Standards for decisions. (a) A decision of an independent review
14organization regarding an adverse determination must be consistent with the terms
15of the health benefit plan under which the adverse determination was made.
AB518,11,2016 (b) A decision of an independent review organization regarding an
17experimental treatment determination is limited to a determination of whether the
18proposed treatment is experimental. The independent review organization shall
19determine that the treatment is not experimental and find in favor of the insured
20only if the independent review organization finds all of the following:
AB518,11,2321 1. The insured has a terminal condition, or the insured's ability to regain or
22maintain maximum function would be impaired by withholding the proposed
23treatment.
AB518,12,3
12. The insured has a condition for which standard treatment would not be
2medically indicated for the insured or for which there is no standard treatment
3available that would be as beneficial for the insured as the proposed treatment.
AB518,12,64 3. Scientifically valid studies using accepted protocols and published in peer
5reviewed literature demonstrate that the proposed treatment is likely to be more
6beneficial for the insured than available standard treatment.
AB518,12,97 4. The proposed treatment is not specifically excluded under the terms of the
8health benefit plan and would be covered except for the determination that the
9treatment is experimental for the insured's condition.
AB518,12,15 10(4) Certification of independent review organizations. (a) The commissioner
11shall certify independent review organizations. An independent review
12organization must demonstrate to the satisfaction of the commissioner that it is
13unbiased, as defined by the commissioner by rule. An organization certified under
14this paragraph must be recertified on a biennial basis to continue to provide
15independent review services under this section.
AB518,12,2016 (b) An organization applying for certification or recertification as an
17independent review organization shall pay the applicable fee under s. 601.31 (1) (Lp)
18or (Lr). Every organization certified or recertified as an independent review
19organization shall file a report with the commissioner in accordance with rules
20promulgated under sub. (5) (a) 4.
AB518,12,2421 (c) The commissioner may examine, audit or accept an audit of the books and
22records of an independent review organization as provided for examination of
23licensees and permittees under s. 601.43 (1), (3), (4) and (5), to be conducted as
24provided in s. 601.44, and with costs to be paid as provided in s. 601.45.
AB518,13,9
1(d) The commissioner may revoke, suspend or limit in whole or in part the
2certification of an independent review organization, or may refuse to recertify an
3independent review organization, if the commissioner finds that the independent
4review organization is unqualified or has violated an insurance statute or rule or a
5valid order of the commissioner under s. 601.41 (4), or if the independent review
6organization's methods or practices in the conduct of its business endanger, or its
7financial resources are inadequate to safeguard, the legitimate interests of
8consumers and the public. The commissioner may summarily suspend an
9independent review organization's certification under s. 227.51 (3).
AB518,13,12 10(5) Rules; report; adjustments. (a) The commissioner shall promulgate rules
11for the independent review required under this section. The rules shall include at
12least all of the following:
AB518,13,1413 1. The application procedures for certification and recertification as an
14independent review organization.
AB518,13,1715 2. The standards that the commissioner will use for certifying and recertifying
16organizations as independent review organizations, including standards for
17determining whether an independent review organization is unbiased.
AB518,13,1918 3. Procedures and processes, in addition to those in sub. (3), that independent
19review organizations must follow.
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