SB562: Bill Text

SB562,49,19 260.30 Service areas; selection and payment of health care providers and health care networks. (1) Establishment of areas where services will be provided. The board may establish areas in the state, which may be counties, multicounty regions, or other areas, for the purpose of receiving bids from health care networks. These areas shall be established so as to maximize the level and quality of competition among health care networks or to increase the number of provider choices available to eligible persons and participants in the areas.

SB562,49,22 (2) Options available in each area. In each area designated by the board under sub. (1), the board shall offer both of the following options for delivery of health care services under the plan:

SB562,50,6 (a) An option, known as the "fee-for-service option," under which participants must choose a primary care provider, may be referred by the primary care provider to any medical specialist, and may be admitted by the primary care provider or specialist to any hospital or other facility, for the purpose of receiving the benefits provided under this chapter. Under this option, the board, with the assistance of one or more administrators chosen by a competitive bidding process and with whom the board has contracted, shall pay directly, at the provider payment rates established by the board under sub. (7) (b) 1., for all health care services and articles that are covered under the plan.

SB562,50,11 (b) An option under which one or more health care networks that meet the qualifying criteria in sub. (4) and are certified under sub. (5) provide health care services to participants. The board is required to offer this option in each area designated by the board to the extent that qualifying health care networks exist in the area.

SB562,50,16 (3) Solicitation of bids from health care networks. The board shall annually solicit sealed risk-adjusted premium bids from competing health care networks for the purpose of offering health care coverage to participants. The board shall request each bidder to submit information pertaining to whether the bidder is a qualifying health care network, as described in sub. (4).

SB562,50,18 (4) Qualifying health care networks. A health care network is qualifying if it does all of the following:

SB562,50,24 (a) Demonstrates to the satisfaction of the board that the fixed monthly risk-adjusted amount that it bids to provide participants with the health care benefits specified in this chapter reasonably reflects its estimated actual costs for providing participants with such benefits in light of its underlying efficiency as a network, and has not been artificially underbid for the predatory purpose of gaining market share.

SB562,51,2 (b) Will spend at least 92 percent of the revenue it receives under this chapter on one of the following:

SB562,51,4 1. Payments to health care providers in order to provide the health care benefits specified in this chapter to participants who choose the health care network.

SB562,51,6 2. Investments that the health care network has reasonably determined will improve the overall quality or lower the overall cost of patient care.

SB562,51,7 (c) Ensures all of the following:

SB562,51,11 1. That participants living in an area that the health care network serves shall not be required to drive more than 30 minutes, or, in a metropolitan area served by mass transit, spend more than 60 minutes using mass transit facilities, in order to reach the offices of at least 2 primary care providers, as defined by the board.

SB562,51,16 2. That physicians, physician assistants, nurses, clinics, hospitals, and other health care providers and facilities, including providers and facilities that specialize in mental health services and alcohol and other drug abuse treatment, are conveniently available, as defined by the board, to participants living in every part of the area that the health care network serves.

SB562,51,20 (d) Ensures that participants have access, 24 hours a day, 7 days a week, to a toll-free hotline and help desk that is staffed by persons who live in the area and who have been fully trained to communicate the benefits provided under this chapter and the choices of providers that participants have in using the health care network.

SB562,51,22 (e) Ensures that each participant who chooses the health care network selects a primary care provider who is responsible for overseeing all of the participant's care.

SB562,51,25 (f) Will provide each participant with medically appropriate and high-quality health care, including mental health services and alcohol or other drug abuse treatment, in a highly coordinated manner.

SB562,52,7 (g) Emphasizes, in its policies and operations, the promotion of healthy lifestyles; preventive care, including early identification of and response to high-risk individuals and groups, early identification of and response to health disorders, disease management, including chronic care management, and best practices, including the appropriate use of primary care, medical specialists, medications, and hospital emergency rooms; and the utilization of continuous quality improvement standards and practices that are generally accepted in the medical field.

SB562,52,12 (h) Has developed and is implementing a program, including providing incentives to providers when appropriate, to promote health care quality, increase the transparency of health care cost and quality information, ensure the confidentiality of medical information, and advance the appropriate use of technology.

SB562,52,20 (i) Has entered into shared service agreements with out-of-network medical specialists, hospitals, and other facilities, including medical centers of excellence in the state, through which participants can obtain, at no additional expense to participants beyond the normally required level of cost sharing, the services of out-of-network providers that the network's primary care physicians selected by participants have determined is necessary to ensure medically appropriate and high-quality health care, to facilitate the best outcome, or, without reducing the quality of care, to lower costs.

SB562,52,22 (j) Has in place a comprehensive, shared, electronic patient records and treatment tracking system and an electronic provider payment system.

SB562,52,24 (k) Has adopted and implemented a strong policy to safeguard against conflicts of interest.

SB562,53,6 (L) Has been organized by physicians or other health care providers, a cooperative, or an entity whose mission includes improving the quality and lowering the cost of health care, including the avoidance of unnecessary operating and capital costs arising from inappropriate utilization or inefficient delivery of health care services, unwarranted duplication of services and infrastructure, or creation of excess capacity.

SB562,53,11 (m) Agrees to enroll and provide the benefits specified in this chapter to all participants who choose the health care network, regardless of the participant's age, sex, race, religion, national origin, sexual orientation, health status, marital status, disability status, or employment status, except that a health care network may do one of the following:

SB562,53,17 1. Limit the number of new enrollees it accepts if the health care network certifies to the board that accepting more than a specified number of enrollees would make it impossible to provide all enrollees with the benefits specified in this chapter at the level of quality that the network is committed to maintaining, provided that the health care network uses a random method for deciding which new enrollees it accepts.

SB562,53,23 2. Limit the participants that it serves to a specific affinity group, such as farmers or teachers, that the health care network has certified to the board, provided that the limitation does not involve discrimination based on any of the factors described in this paragraph and has neither been created for the purpose, nor will have the effect, of screening out higher-risk enrollees. This subdivision applies only to affinity groups that are in existence as of December 31, 2008.

SB562,54,3 (5) Certification of health care networks and classification of bids. (a) The board shall review the bids submitted under sub. (3), the information submitted by bidders pertaining to whether the bidders are qualifying health care networks, and other evidence provided to the board as to whether a particular bidder is a qualifying health care network.

SB562,54,6 (b) Based on the information about bidder qualification submitted or otherwise provided under par. (a), the board shall certify which health care networks are qualifying health care networks.

SB562,54,14 (c) With respect to all health care networks that the board certifies under par. (b), the board shall open the submitted, sealed bids at a predetermined time. The board shall classify the certified health care networks according to price and quality measures after comparing their risk-adjusted per-month bids and assessing their quality. The board shall classify the network that bid the lowest price as the lowest-cost network, and shall classify as a low-cost network any network that has bid a price that is close to the price bid by the lowest-cost network. Any other network shall be classified as a higher-cost network.

SB562,55,2 (6) Open enrollment. The board shall provide an annual open enrollment period during which each participant may select a certified health care network from among those offered, or a fee-for-service option. Coverage shall be effective on the following January 1. A participant who does not select a certified health care network or the fee-for-service option will be assigned randomly to one of the networks that have been classified under sub. (5) as having submitted the lowest or a low bid and as performing well on quality measures, or to the fee-for-service option if that is the lowest-cost option. A participant who selects the fee-for-service option or a certified health care network that has been classified as a higher-cost network, but who fails to pay the additional payment under sub. (7) (a) 2., shall be assigned randomly to one of the networks that has been classified under sub. (5) as the lowest-cost network or as a low-cost network and as performing well on quality measures, or to the fee-for-service option if that is the lowest-cost option.

SB562,55,12 (7) Payments to networks and providers. (a) Payments to health care networks. 1. On behalf of each participant who selects or has been assigned to a certified health care network that has been classified under sub. (5) (c) as the lowest-cost network or a low-cost network and as performing well on quality measures, the board shall pay monthly to the health care network the full risk-adjusted per-member per-month amount that was bid by the network. The dollar amount shall be actuarially adjusted for the participant based on age, sex, and other appropriate risk factors determined by the board. A participant who selects or is assigned to the lowest-cost network or a low-cost network shall not be required to pay any additional amount to the network.

SB562,55,22 2. If a participant chooses instead to enroll in a certified health care network that has been classified under sub. (5) (c) as a higher-cost network, the board shall pay monthly to the chosen health care network an amount equal to the bid submitted by the network that the board classified under sub. (5) (c) as the lowest-cost network and as having performed well on quality measures. The dollar amount shall be actuarially adjusted for the participant based on age, sex, and other appropriate risk factors determined by the board. A participant who chooses to enroll in a higher-cost network shall be required to pay monthly, in addition to the amount paid by the board, an amount sufficient to ensure that the chosen network receives the full price bid by that network.

SB562,56,3 3. The board may retain a percentage of the dollar amounts established for each participant under subds. 1. and 2. to pay to certified health care networks that have incurred disproportionate risk not fully compensated for by the actuarial adjustment in the amount established for each eligible person. Any payment to a certified health care network under this subdivision shall reflect the disproportionate risk incurred by the health care network.

SB562,56,10 (b) Payments to fee-for-service providers. 1. The board shall establish provider payment rates that will be paid to providers of covered services and articles that are provided to participants who choose the fee-for-service option under sub. (2) (a). The payment rates shall be fair and adequate to ensure that this state is able to retain the highest quality of medical practitioners. The board shall limit increases in the provider payment rate for each service or article such that any increase in per person spending under the plan does not exceed the national rate of medical inflation.

SB562,56,16 2. Except for deductibles, copayments, coinsurance, and any other cost sharing required or authorized under the plan, a provider of a covered service or article shall accept as payment in full for the covered service or article the payment rate determined under subd. 1. and may not bill a participant who receives the service or article for any amount by which the charge for the service or article is reduced under subd. 1.

SB562,56,20 3. The board, with the assistance of its actuarial consultants, shall establish the monthly risk-adjusted cost of the fee-for-service option offered to participants under sub. (2) (a). The board shall classify the fee-for-service option in the same manner as the board classifies certified health care networks under sub. (5) (c).

SB562,56,25 4. If the board has determined under sub. (5) (c) that there is at least one certified low-cost health care network in an area, which may be the lowest-cost health care network, and if the fee-for-service option offered in that area has been classified as a higher-cost choice under subd. 3., the cost to a participant enrolling in the fee-for-service option shall be determined as follows:

SB562,57,7 a. If there are available to the participant 3 or more certified health care networks classified under sub. (5) (c) as low-cost networks, or as the lowest-cost network and 2 or more low-cost networks, the participant shall pay the difference between the cost of the lowest-cost health care network and the monthly risk-adjusted cost established under subd. 3. for the fee-for-service option, except that the amount paid may not exceed $100 per month for an individual, or $200 per month for a family, as adjusted for medical inflation.

SB562,57,14 b. If there are available to the participant 2 certified health care networks classified under sub. (5) (c) as low-cost networks, or as the lowest-cost network and one low-cost network, the participant shall pay the difference between the cost of the lowest-cost health care network and the monthly risk-adjusted cost established under subd. 3. for the fee-for-service option, except that the amount paid may not exceed $65 per month for an individual, or $125 per month for a family, as adjusted for medical inflation.

SB562,57,20 c. If there is available to the participant only one certified health care network classified under sub. (5) (c) as a low-cost network, or as the lowest-cost network, the person shall pay the difference between the cost of the lowest-cost health care network and the monthly risk-adjusted cost established under subd. 3. for the fee-for-service option, except that the amount paid may not exceed $25 per month for an individual, and $50 per month for a family, as adjusted for medical inflation.

SB562,57,23 5. If the board has determined, under sub. (5) (c), that there is no certified lowest-cost health care network or low-cost health care network in the area, there shall be no extra cost to the participant enrolling in the fee-for-service option.

SB562,58,7 (8) Incentive payments to fee-for-service providers. Health care providers and facilities providing services under the fee-for-service option under sub. (2) (a) shall be encouraged to collaborate with each other through financial incentives established by the board. Providers shall work with facilities to pool infrastructure and resources; to implement the use of best practices and quality measures; and to establish organized processes that will result in high-quality, low-cost medical care. The board shall establish an incentive payment system to providers and facilities that comply with this subsection, in accordance with criteria established by the board.

SB562,58,19 (9) Pharmacy benefit. Except for prescription drugs to which a deductible applies, the board shall assume the risk for, and pay directly for, prescription drugs provided to participants. In implementing this requirement, the board shall replicate the prescription drug buying system developed by the group insurance board for prescription drug coverage under the state employee health plan under s. 40.51 (6), unless the board determines that another approach would be more cost-effective. The board may join the prescription drug purchasing arrangement under this chapter with similar arrangements or programs in other states to form a multistate purchasing group to negotiate with prescription drug manufacturers and distributors for reduced prescription drug prices, or to contract with a 3rd party, such as a private pharmacy benefits manager, to negotiate with prescription drug manufacturers and distributors for reduced prescription drug prices.

SB562,58,23 260.35 Subrogation. The board and authority are entitled to the right of subrogation for reimbursement to the extent that a participant may recover reimbursement for health care services and items in an action or claim against any 3rd party.

SB562,59,2 260.37 Employer-provided health care benefits. Nothing in this chapter prevents an employer, or a Taft-Hartley trust on behalf of an employer, from paying all or part of any cost sharing under s. 260.20 or 260.30, or from providing any health care benefits not provided under the plan, for any of the employer's employees.

SB562,59,4 260.40 Assessments, individuals and businesses. (1) Definitions. In this section:

SB562,59,5 (a) "Department" means the department of revenue.

SB562,59,9 (b) "Dependent" means a spouse, an unmarried child under the age of 19 years, an unmarried child who is a full-time student under the age of 21 years and who is financially dependent upon the parent, or an unmarried child of any age who is medically certified as disabled and who is dependent upon the parent.

SB562,59,11 (c) "Eligible individual" means an individual who is eligible to participate in the plan, other than an employee or a self-employed individual.

SB562,59,12 (d) "Employee" means an individual who has an employer.

SB562,59,14 (e) "Employer" means a person who is required under the Internal Revenue Code to file form 941.

SB562,59,17 (em) "Household" means an individual who is either an eligible individual, an employee, or a self-employed individual, and the individual's immediate family, as that term is defined by the board under s. 260.10 (7) (c).

SB562,59,24 (f) "Medical inflation" means the percentage change between the U.S. consumer price index for all urban consumers, U.S. city average, for the medical care group only, including medical care commodities and medical care services, for the month of August of the previous year and the U.S. consumer price index for all urban consumers, U.S. city average, for the medical care group only, including medical care commodities and medical care services, for the month of August 2008, as determined by the U.S. department of labor.

SB562,60,2 (g) "Poverty line" means the federal poverty line, as defined under 42 USC 9902 (2), for a family the size of the individual's family.

SB562,60,4 (h) "Self-employed individual" means an individual who is required under the Internal Revenue Code to file schedule SE.

SB562,60,5 (i) "Small employer" means an employer who has no more than 10 employees.

SB562,60,6 (j) "Social security wages" means:

SB562,60,9 1. For purposes of sub. (2) (a), the amount of wages, as defined in section 3121 (a) of the Internal Revenue Code, paid to an employee by an employer in a taxable year, up to a maximum amount that is equal to the social security wage base.

SB562,60,13 2. For purposes of sub. (2) (b), the amount of net earnings from self-employment, as defined in section 1402 (a) of the Internal Revenue Code, received by an individual in a taxable year, up to a maximum amount that is equal to the social security wage base.

SB562,60,18 3. For purposes of sub. (3), the amount of wages, as defined in section 3121 (a) of the Internal Revenue Code, paid by an employer in a taxable year with respect to employment, as defined in section 3121 (b) of the Internal Revenue Code, up to a maximum amount that is equal to the social security wage base multiplied by the number of the employer's employees.

SB562,60,20 (2) Individuals. Subject to sub. (4), the board shall calculate the following assessments, based on its anticipated revenue needs:

SB562,60,22 (a) For an employee who is under the age of 65, a percent of social security wages that is at least 2 percent and not more than 4 percent, subject to the following:

SB562,60,24 1. If the employee has social security wages that are 150 percent or less of the poverty line, the employee may not be assessed.

SB562,61,5 2. If the employee has no dependents and his or her social security wages are more than 150 percent and 200 percent or less of the poverty line the assessment shall be in an amount, as determined by the board on a sliding scale based on the employee's social security wages, that is between zero percent and 4 percent of the employee's social security wages.

SB562,61,11 3. If the employee has one or more dependents, or is a single individual who is pregnant, and the employee's social security wages are more than 150 percent and 300 percent or less of the poverty line the assessment shall be in an amount, as determined by the board on a sliding scale based on the employee's social security wages, that is between zero percent and 4 percent of the employee's social security wages.

SB562,61,13 (b) For a self-employed individual who is under the age of 65, a percent of social security wages that is at least 9 percent and not more than 10 percent.

SB562,61,17 (c) For an eligible individual who has no social security wages under sub. (1) (j) 1. or 2. or, from an employer, under sub. (1) (j) 3., 10 percent of federal adjusted gross income, up to the maximum amount of income that is subject to social security tax.

SB562,61,21 (3) Employers. (a) Subject to pars. (b), (c), and (d) and sub. (4), the board shall calculate an assessment, based on its anticipated revenue needs, that is a percent of aggregate social security wages that is at least 9 percent and not more than 12 percent.

SB562,61,24 (b) Except as provided in par. (d), for taxable year beginning after December 31, 2009, and before January 1, 2011, the assessment imposed on a small employer shall be 33 percent of the amount calculated for that employer under par. (a).

SB562,62,3 (c) Except as provided in par. (d), for taxable year beginning after December 31, 2010, and before January 1, 2012, the assessment imposed on a small employer shall be 67 percent of the amount calculated for that employer under par. (a).

SB562,62,10 (d) If a small employer begins doing business in this state, as defined in s. 71.22 (1r), during the period beginning on January 1, 2010, and ending on December 31, 2012, for the small employer's first taxable year the assessment imposed on the small employer shall be 33 percent of the amount calculated for that employer under par. (a) and for the small employer's 2nd taxable year the assessment imposed on the small employer shall be 67 percent of the amount calculated for that employer under par. (a).

SB562,62,21 (4) Collection and calculation of assessments. (a) For taxable years beginning after December 31, 2009, the department shall impose on, and collect from, individuals the assessment amounts that the board calculates under sub. (2), either through an assessment that is collected as part of the income tax under subch. I of ch. 71, or through another method devised by the department. For taxable years beginning after December 31, 2009, the department shall impose on, and collect from, employers the assessment amounts that the board calculates under sub. (3), either through an assessment that is collected as part of the tax under subch. IV of ch. 71, or through another method devised by the department. Section 71.80 (1) (c), as it applies to ch. 71, applies to the department's imposition and collection of assessments under this section.

SB562,62,23 (b) The amounts that the department collects under par. (a) shall be deposited into the Healthy Wisconsin trust fund under s. 25.775.

SB562,63,2 (c) The board may annually increase or decrease the amounts that may be assessed under subs. (2) and (3). No annual increase under this paragraph may exceed the percentage increase for medical inflation unless a greater increase is provided for by law.

SB562,63,6 (d) The maximum amount of assessment that the department may impose on, and collect from, a household under par. (a) is 4 percent of the annual limit on the contribution and benefit base of the Old-Age, Survivors, and Disability Insurance program, as calculated annually by the U.S. social security administration.

SB562,63,8 260.49 Advisory committee. (1) Duties. The board shall establish a health care advisory committee to advise the board on all of the following:

SB562,63,9 (a) Matters related to promoting healthier lifestyles.

SB562,63,10 (b) Promoting health care quality.

SB562,63,11 (c) Increasing the transparency of health care cost and quality information.

SB562,63,12 (d) Preventive care.

SB562,63,13 (e) Early identification of health disorders.

SB562,63,14 (f) Disease management.

SB562,63,16 (g) The appropriate use of primary care, medical specialists, prescription drugs, and hospital emergency rooms.

SB562,63,17 (h) Confidentiality of medical information.

SB562,63,18 (i) The appropriate use of technology.

SB562,63,19 (j) Benefit design.

SB562,63,20 (k) The availability of physicians, hospitals, and other providers.

SB562,63,21 (L) Reducing health care costs.

SB562,63,22 (m) Any other subject assigned to it by the board.

SB562,63,23 (n) Any other subject determined appropriate by the committee.