1999 - 2000 LEGISLATURE
September 30, 1999 - Introduced by Senators Rosenzweig, Robson, Roessler,
Plache, Rude, Risser, Ellis, Panzer, Darling, Erpenbach, Grobschmidt,
Huelsman
and Schultz, cosponsored by Representatives Underheim, Huber,
Urban, Coggs, Ladwig, Jeskewitz, Williams, F. Lasee, Seratti, Spillner,
Owens, Musser, La Fave, Brandemuehl, Hasenohrl
and Miller. Referred to
Committee on Health, Utilities, Veterans and Military Affairs.
SB246,1,4 1An Act to amend 601.42 (4); and to create 601.31 (1) (Lp), 601.31 (1) (Lr), 609.15
2(3) and 609.16 of the statutes; relating to: independent review of managed care
3plan grievance procedure outcomes, providing an exemption from emergency
4rule procedures and granting rule-making authority.
Analysis by the Legislative Reference Bureau
Under current law, every managed care plan, limited service health
organization and preferred provider plan (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 plan to have an independent review procedure under
which an enrollee may have the outcome of a grievance reviewed by an entity that
is independent from the plan. To be eligible for this independent review, the
grievance determination must be adverse to the enrollee; the value of the medical
service, procedure, therapy, drug or device (treatment) that was the subject of the
grievance must be at least $500; and the request for independent review must be
made within one year after the date of the adverse grievance determination.
Whenever a grievance determination is adverse to the enrollee, the plan must
send to the enrollee, along with the notice of the determination, information about
the independent review procedure and the forms necessary for requesting the review.
To request a review, an enrollee must send the completed forms to the commissioner
of insurance (commissioner). The commissioner must promptly assign the review,
on a rotating basis according to the date on which the request is received, to an

independent review organization, which must assign the review to three of its expert
reviewers. Only an independent review organization that has been certified by the
commissioner may be assigned a review. The expert reviewers who conduct the
review 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.
After assigning the review, the commissioner must notify both the enrollee and
the plan of the identity of the independent review organization. Within three days
of receiving this notice, the plan must send to the independent review organization
all of the information that it used in making the adverse grievance determination.
The enrollee may send any additional information that the enrollee considers
relevant. Within five days after receiving the information from the plan, 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 expert reviewers conducting the review must, within 15 days after the
expiration of all relevant time limits in the matter, 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 expert reviewers must make a determination within 72 hours
after the expiration of all relevant time limits in the matter. The bill specifies review
standards for the expert reviewers, including the circumstances under which the
expert reviewers must find that denied treatment was medically necessary and
appropriate and the circumstances under which the expert reviewers must find in
favor of the enrollee if treatment was denied on the basis that it was experimental.
An independent review determination in favor of the enrollee is binding on the plan,
while an independent review determination in favor of the plan creates a rebuttable
presumption in any subsequent action that the plan's original determination was
appropriate. All costs of an independent review must be paid by the plan.
The bill contains prohibitions aimed at avoiding conflicts of interest for
independent review organizations and expert reviewers, such as prohibiting an
independent review organization from being a subsidiary of, or from being owned or
controlled by, a health care plan, a trade association of health care plans or a
professional association of health care providers. The bill also provides immunity
from liability for determinations made in independent reviews to independent
review organizations and employes, agents or contractors of an independent review
organization.
Finally, the bill requires the commissioner to provide a current listing of all
independent review organizations to any person who requests a copy and, at least
quarterly, to every plan. The commissioner must submit an annual report on the
independent review system to both houses of the legislature and to the governor.

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:
SB246, s. 1 1Section 1. 601.31 (1) (Lp) of the statutes is created to read:
SB246,3,32 601.31 (1) (Lp) For certifying as an independent review organization under s.
3609.16 (7), $400.
SB246, s. 2 4Section 2. 601.31 (1) (Lr) of the statutes is created to read:
SB246,3,65 601.31 (1) (Lr) For each recertification as an independent review organization
6under s. 609.16 (7), $100.
SB246, s. 3 7Section 3. 601.42 (4) of the statutes is amended to read:
SB246,3,188 601.42 (4) Replies. Any officer, manager or general agent of any insurer
9authorized to do or doing an insurance business in this state, any person controlling
10or having a contract under which the person has a right to control such an insurer,
11whether exclusively or otherwise, any person with executive authority over or in
12charge of any segment of such an insurer's affairs, any individual practice
13association or officer, director or manager of an individual practice association, any
14insurance agent or other person licensed under chs. 600 to 646, any provider of
15services under a continuing care contract, as defined in s. 647.01 (2), any
16independent review organization certified under s. 609.16 (7)
or any health care
17provider, as defined in s. 655.001 (8), shall reply promptly in writing or in other
18designated form, to any written inquiry from the commissioner requesting a reply.
SB246, s. 4 19Section 4. 609.15 (3) of the statutes is created to read:
SB246,4,720 609.15 (3) Whenever the disposition of a grievance under this section is adverse
21to the enrollee, the notice of the grievance disposition under sub. (2) (d) shall include

1a written statement that the enrollee may obtain an independent review of the
2disposition as provided in s. 609.16, instructions on how to request an independent
3review, instructions on what information and documentation are required for
4independent review and information about the procedure that will be followed in the
5independent review. The limited service health organization, preferred provider
6plan or managed care plan shall include with the notice the forms necessary for
7requesting independent review.
SB246, s. 5 8Section 5. 609.16 of the statutes is created to read:
SB246,4,11 9609.16 Independent review of grievance procedure outcomes. (1)
10Definition. In this section, "treatment" means a medical service, diagnosis,
11procedure, therapy, drug or device.
SB246,4,17 12(2) Requirement to establish; eligibility criteria. Every limited service
13health organization, preferred provider plan and managed care plan shall establish
14an independent review procedure that is in compliance with this section. Under the
15independent review procedure, an enrollee of the plan shall be able to request and
16obtain an independent review of a grievance determination under s. 609.15 if all of
17the following apply:
SB246,4,1818 (a) The grievance determination is adverse to the enrollee.
SB246,4,2019 (b) The value of the treatment that was the subject of the grievance is at least
20$500.
SB246,4,2321 (c) The commissioner receives a completed written request for independent
22review under sub. (3) (a) not more than one year after the date of the adverse
23grievance determination.
SB246,5,6 24(3) Requesting independent review. (a) To request an independent review, an
25enrollee shall submit a written request to the commissioner on forms developed by

1the commissioner and provided to the enrollee by the limited service health
2organization, preferred provider plan or managed care plan under s. 609.15 (3). An
3independent review may be requested on behalf of an enrollee by his or her legal
4guardian or representative, including an agent under a power of attorney or durable
5power of attorney or a health care agent under a power of attorney for health care,
6and on behalf of an enrollee who is a minor by the minor's parent or guardian.
SB246,5,167 (b) Upon receipt of a timely, completed written request for independent review,
8the commissioner shall notify the enrollee, or his or her authorized representative,
9that the request was received. The commissioner shall promptly assign the matter,
10on a rotating basis according to the date on which the request was received, to a
11certified independent review organization, which shall assign the matter to 3 of its
12expert reviewers who have expertise in treating the condition that is the subject of
13the review. The commissioner shall provide written notification to the enrollee, or
14his or her authorized representative, and the limited service health organization,
15preferred provider plan or managed care plan of the name and address of the
16independent review organization assigned to the matter.
SB246,5,1917 (c) The limited service health organization, preferred provider plan or managed
18care plan involved in an independent review shall be responsible for the cost of
19applying for and obtaining the independent review.
SB246,5,2320 (d) The enrollee and the limited service health organization, preferred provider
21plan or managed care plan shall cooperate fully with the independent review
22organization to provide the information and documentation necessary for making a
23determination, including executing any necessary releases for medical records.
SB246,6,2 24(4) Procedure. (a) Within 3 business days after receiving notification of the
25name and address of the independent review organization under sub. (3) (b), the

1limited service health organization, preferred provider plan or managed care plan
2shall submit to the independent review organization copies of all of the following:
SB246,6,53 1. Any information submitted to the limited service health organization,
4preferred provider plan or managed care plan by the enrollee in support of the
5enrollee's position in the grievance under s. 609.15.
SB246,6,76 2. A copy of the contract provisions or evidence of coverage of the limited service
7health organization, preferred provider plan or managed care plan.
SB246,6,108 3. Any other relevant documents or information used by the limited service
9health organization, preferred provider plan or managed care plan in the grievance
10determination under s. 609.15.
SB246,6,1411 (b) Upon the request of the enrollee, the limited service health organization,
12preferred provider plan or managed care plan shall submit to the enrollee copies of
13the documents and other information submitted to the independent review
14organization under par. (a), except for any proprietary or confidential information.
SB246,6,1615 (c) The enrollee may provide to the independent review organization any
16additional information that the enrollee considers relevant.
SB246,6,2317 (d) Within 5 business days after receiving the information under par. (a), the
18independent review organization shall request any additional information that it
19requires for the review from the enrollee or the limited service health organization,
20preferred provider plan or managed care plan. Within 5 business days after
21receiving a request for additional information, the enrollee or the limited service
22health organization, preferred provider plan or managed care plan shall submit the
23information or an explanation of why the information is not being submitted.
SB246,7,524 (e) The independent review organization shall provide to the limited service
25health organization, preferred provider plan or managed care plan any additional

1information received from the enrollee under pars. (c) and (d). If, on the basis of the
2additional information, the limited service health organization, preferred provider
3plan or managed care plan reconsiders the enrollee's grievance and determines that
4the treatment that was the subject of the grievance should be covered, the
5independent review is terminated.
SB246,7,136 (f) If the independent review is not terminated under par. (e), the expert
7reviewers on behalf of the independent review organization shall, within 15 business
8days after the expiration of all time limits that apply in the matter, make a
9determination on the basis of the documents and information submitted under this
10subsection. The independent review organization shall send by 1st class mail to the
11commissioner, the enrollee and the limited service health organization, preferred
12provider plan or managed care plan a copy of the determination, which shall be in
13writing and state the basis for the decision.
SB246,7,1814 (g) If, in the judgment of the enrollee's treating health care provider, the health
15condition of the enrollee is such that following the procedure outlined in pars. (a) to
16(f) would jeopardize the life or health of the enrollee or the enrollee's ability to regain
17maximum function, the procedure outlined in pars. (a) to (f) shall be followed with
18the following differences:
SB246,7,2119 1. The limited service health organization, preferred provider plan or managed
20care plan shall submit the information under par. (a) within one day after receiving
21the notification under sub. (3) (b).
SB246,7,2422 2. The independent review organization shall request any additional
23information under par. (d) within 2 business days after receiving the information
24under par. (a).
SB246,8,4
13. The enrollee or limited service health organization, preferred provider plan
2or managed care plan shall, within 2 days after receiving a request under par. (d),
3submit any information requested or an explanation of why the information is not
4being submitted.
SB246,8,75 4. The expert reviewers shall make their determination under par. (f) within
672 hours after the expiration of the time limits under this paragraph that apply in
7the matter.
SB246,8,108 (h) Any time limits specified in this subsection may be extended by mutual
9agreement between the enrollee, or his or her authorized representative, and the
10limited service health organization, preferred provider plan or managed care plan.
SB246,8,1211 (i) Any information required or authorized to be submitted under this
12subsection may be submitted by facsimile or other electronic transmission.
SB246,8,14 13(5) Standards for review. In making the determination under sub. (4) (f), all
14of the following apply:
SB246,8,1915 (a) If coverage of the treatment that is the subject of the review was denied on
16the basis that the treatment was not medically necessary or appropriate, the expert
17reviewers shall find that the treatment was medically necessary and appropriate if,
18in light of conditions at the time the treatment was proposed, the treatment satisfied
19all of the following:
SB246,8,2120 1. Was appropriate and consistent with the diagnosis and not providing it could
21adversely affect or fail to improve the enrollee's condition.
SB246,8,2322 2. Was compatible with the standards of acceptable medical practice in the
23United States.
SB246,8,2524 3. Was provided, or was to be provided, in a safe and appropriate setting, given
25the nature of the diagnosis and the severity of the symptoms.
SB246,9,2
14. Was not provided, or was not to be provided, solely for the convenience of the
2enrollee, the health care provider or the hospital.
SB246,9,43 5. Was not primarily custodial care, unless custodial care is a covered benefit
4under the enrollee's coverage.
SB246,9,75 (b) If coverage of the treatment that is the subject of the review was denied on
6the basis that the treatment was experimental, the expert reviewers shall find in
7favor of the enrollee if all of the following apply:
SB246,9,98 1. The treatment has been approved by the federal food and drug
9administration.
SB246,9,1310 2. Medically and scientifically accepted evidence demonstrates that the
11expected benefits of the proposed treatment would be greater than the benefits of any
12available standard treatment and that the adverse risks of the proposed treatment
13are not substantially higher than those of standard treatments.
SB246,9,1614 (c) The expert reviewers shall apply prudent professional practices and shall
15ensure that medically and scientifically accepted evidence supports the
16determination.
SB246,9,20 17(6) Effect of determination. (a) A determination under sub. (4) (f) in favor
18of the enrollee is final and binding on the limited service health organization,
19preferred provider plan or managed care plan, which shall promptly comply with the
20determination.
SB246,9,2521 (b) A determination under sub. (4) (f) in favor of the limited service health
22organization, preferred provider plan or managed care plan creates a rebuttable
23presumption in any subsequent action that the original coverage determination of
24the limited service health organization, preferred provider plan or managed care
25plan was appropriate.
SB246,10,6
1(c) An independent review organization is immune from any civil or criminal
2liability that may result because of an independent review determination made
3under this section. An employe, agent or contractor of an independent review
4organization is immune from civil liability and criminal prosecution for any act or
5omission done in good faith within the scope of his or her powers and duties under
6this section.
SB246,10,9 7(7) Independent review organizations; certification. (a) The commissioner
8shall certify and recertify independent review organizations that may conduct
9independent reviews under this section.
SB246,10,1110 (b) An independent review organization shall submit to the commissioner in
11its application for certification the following information:
SB246,10,1312 1. The names of all owners of more than 5% of any stock or options, if a publicly
13held organization.
SB246,10,1414 2. The names of all holders of bonds or notes in excess of $100,000, if any.
SB246,10,1715 3. The names and types of business of all corporations and organizations that
16the independent review organization controls or is affiliated with and the nature and
17extent of any ownership or control.
SB246,10,2118 4. The names of all directors, officers and executives of the independent review
19organization and the nature of any relationship that a director, officer or executive
20has, if any, with a provider group or a health care insurer, including a limited service
21health organization, preferred provider plan or managed care plan.
SB246,10,2322 (c) Within 30 days of any change in the information submitted under par. (b),
23the independent review organization shall notify the commissioner of the change.
SB246,11,3
1(d) An independent review organization may not be a subsidiary of, or owned
2or controlled by, a health care plan, a trade association of health care plans or a
3professional association of health care providers.
SB246,11,54 (e) An expert reviewer assigned by an independent review organization to
5conduct a review must satisfy all of the following requirements:
SB246,11,86 1. Be a health care provider who is expert in treating the medical condition that
7is the subject of the review and who is knowledgeable about the treatment that is the
8subject of the review through actual clinical experience.
SB246,11,149 2. Hold a credential, as defined in s. 440.01 (2) (a), that is not limited or
10restricted; or hold a license, certificate, registration or permit that authorizes or
11qualifies the health care provider to perform acts that are substantially the same as
12those acts authorized by a credential, as defined in s. 440.01 (2) (a), that was issued
13by a governmental authority in a jurisdiction outside this state and that is not
14limited or restricted.
SB246,11,1615 3. If a physician, hold a current certification by a recognized American medical
16specialty board in the area or areas appropriate to the subject of the review.
SB246,11,1917 4. Have no history of disciplinary sanctions, including loss of staff privileges,
18taken or pending by the medical examining board or another regulatory body or by
19any hospital or government.
SB246,11,2220 (f) An independent review organization or an expert reviewer of the
21organization may not have any material professional, familial or financial conflict
22of interest with any of the following:
SB246,11,2523 1. A limited service health organization, preferred provider plan or managed
24care plan that is involved in a review being conducted by the organization or
25reviewer.
SB246,12,3
12. An officer, director or management employe of a limited service health
2organization, preferred provider plan or managed care plan that is involved in a
3review being conducted by the organization or reviewer.
SB246,12,64 3. The health care provider, or the provider group or independent practice
5association of the health care provider, who proposed or who is proposing the
6treatment that is being reviewed.
SB246,12,87 4. The institution at which the treatment being reviewed was or would be
8provided.
SB246,12,99 5. The enrollee or his or her authorized representative.
SB246,12,1010 6. The development or manufacture of the treatment being reviewed.
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