Date:October 22, 2001
To:All Insurers Authorized to do Business in Wisconsin
From:Connie L. O'Connell, Commissioner of Insurance
Subject:Newly Enacted Legislation-2001 Wisconsin Act 16
Implementation of Ins 18 - Independent Review of Health Plan Decisions

This bulletin contains a summary of the provisions of 2001 Wisconsin Act 16 (SB 55), the 2001-2003 Biennial Budget and important information regarding the implementation of Ins 18 which directly affect OCI and the insurance industry. You should review the bulletin and determine which laws apply to your company. You may obtain copies of any legislation from Legislative Documents, 1 East Main Street, Madison, WI 53703, and (608) 266-2400 or through the Legislature's web page at www.legis.state.wi.us.

ITEMS INCLUDED IN WISCONSIN ACT 16

100.52 Telephone Solicitations. Prohibits telephone solicitors or an employee or contractor of a telephone solicitor from contacting residential customers who are listed on a nonsolicitation directory. Requires registration of telephone solicitors with the Department of Agriculture Trade and Consumer Protection. Requires individuals who make solicitations to identify the telephone solicitor and the person who is selling the property, goods or service, or who is receiving the contribution, donation, grant, or pledge of money, credit, property or other thing of any kind that is the reason for the solicitation. Requires telephone solicitors, employees or contractors to provide nonresidential customers, upon request, with the mailing address to notify the solicitor that the nonresidential customer does not wish to receive telephone solicitations. Insurers and agents should review these provisions to ensure they are in compliance.

"Telephone solicitor" means a person, other than a nonprofit organization or an employee or contractor of a nonprofit organization, that employs or contracts with an individual to make a telephone solicitation.

The statute became effective on September 1, 2001, but the directory will not be created until administrative rules have been promulgated to govern the administration of the directory. The Department of Agriculture, Trade and Consumer Protection (DATCP) will administer the non-solicitation directory and is charged with promulgating the administrative rule. A statement of scope for the rulemaking was submitted to the legislature on October 5, 2001. Administrative rules generally take a minimum of nine months from submission of the scope statement to promulgation of the final rule. DATCP has indicated that it will be seeking input from affected industries, including insurers, at the appropriate time.

601.73 Default Judgements. Entitles plaintiffs or complainants to a judgement by default after 20 days after the mailing date of service of process by OCI under s. 601.72, Wis. Stat., if the proceeding is to foreclose or otherwise enforce a lien or security. For all other proceedings in which process is served by OCI under s. 601.72, Wis. Stat., a period for entering a judgement of default remains at 45 days.

These changes became effective on September 1, 2001.

Chapter 609 Defined Network Plans. The amendment to chapter 609, Wis. Stat., replaces the term "managed care plan" with the term "defined network plan," throughout the chapter. The definition has been renumbered but its content remains unchanged. The Act also relaxes some of the requirements applicable to preferred provider plans, but only if preferred provider plans do not require or impose financial incentives related to referrals for access to a participating or non-participating provider. A preferred provider plan that utilizes referral requirements or incentives, even if under the pretext of utilization management processes such as pre-authorization for services, is a defined network plan and must meet all the requirements of defined network plans. In addition, a preferred provider plan that imposes material exclusions, deductibles, maximum limits or other conditions that are uniquely applied to out of network provider services, and that results in significant limits on out of network benefits compared to in-network benefits, is a defined network plan.

A preferred provider plan that is also a defined network plan will be required to meet statutory requirements, including all of the following: sufficient number and types of providers to meet the anticipated needs of its enrollees; adequate choice among participating providers that are accessible and qualified; enrollee selection of his or her own primary provider from a list of participating primary care physicians and any other participating providers; referral procedures, if required by the plan to access specialist services; access without referral for obstetric and gynecologic services from participating providers without penalty to the enrollee or participating provider, as defined in s. 609.22 (4m), Wis. Stats.; access to a second opinion from another participating provider; access to emergency medical services without prior authorization; emergency and urgent care services for dependent children who are full-time students attending school outside the service area, telephone access during business and evening hours to ensure adequate access to routine health care services; access plans for enrollees that customarily use languages other than English; continuity of care when participating providers leave the plan; prohibition of any contracted provisions that limit the provider's disclosure of information on treatment alternatives to enrollees; quality assurance standards adequate to identify, evaluate and remedy problems related to access to, and continuity and quality of, care; data reporting requirements; and all mandated benefits as applicable.

An insurer offering a preferred provider plan that qualifies for the relaxed standards of some statutory requirements must comply with all of the following: provide an adequate number of participating providers in each geographic area to service all insureds in those areas; provide enrollees with 24 hour telephone access for emergency care; ensure enrollees are notified of when a participating provider's participation with the plan terminates; provide continuity of care when a provider terminates; develop procedures for remedial action to address quality assurance problems related to access to, and continuity and quality of care; and, if a plan assumes direct responsibility for clinical protocols and utilization management of the plan, the requirement that a physician be appointed as medical director.

To address the listed amendments to Chapter 609, the office has initiated modifications to Ch. Ins 9, Wis. Adm. Code.

These changes became effective on September 1, 2001.

628.46(2m) and 632.875(2) (intro) Timely payment of claims for chiropractic services. Provides that a claim for payment for chiropractic services must be paid within 30 days after the insurer receives clinical documentation from the chiropractor, unless, on the basis of an independent evaluation, an insurer restricts or terminates a patient's coverage for treatment. A written statement of the independent evaluation must be provided to the insured and the chiropractor within 30 days of receiving clinical documentation from the chiropractor that the services were provided. An insurer that denies a claim for chiropractic services based on an independent evaluation determining that the submitted clinical documentation is insufficient to support the claim must identify in a written statement the required clinical documentation. An insurer that receives a resubmission of the claim for chiropractic services with additional clinical documentation must pay the claim within 30 days or must provide a written statement of an independent evaluation stating the basis for denial.

If a claim is paid more than 30 days after receiving clinical documentation, health insurers will be required to add interest to claims. Notification of the right to appeal under s.632.875, Wis. Stat., is required within 30 days after receipt.

This section applies to health insurance policies and does not apply to property and casualty policies, including workers compensation coverage, uninsured and underinsured motorists coverage, and medical payment expense coverage.

These changes became effective on September 1, 2001.

635.02(2) and 635.05(2)(a) Case characteristics and rate regulation. Removes occupation from the definition of case characteristics and includes occupation as a health related rating factor subject to the + 30% rate variance and a maximum annual increase of 15%.

These changes first apply to policies issued or renewed on or after October 1, 2002.

635.12 Annual publication of rates. Requires small employer insurers to annually publish their new business premium rates according to rules established by OCI.

These changes first apply October 1, 2002.

IMPLEMENTATION OF INS 18

Ch. Ins 18 Relating to Grievance Procedures and Independent Review Organizations. On December 1, 2001, ch. Ins 18, Wis. Adm. Code, will go into effect. This administrative rule was promulgated to interpret s. 632.83 and 632.835, Stats., which were effective December 1, 2000. It requires all insurers offering health benefit plans to establish an internal grievance procedure for their insureds and to also offer an independent review by a certified independent review organization whenever it makes an adverse or experimental treatment determination.

ALL INSURERS OFFERING HEALTH BENEFIT PLANS IN WISCONSIN MUST COMPLY WITH THIS RULE. INSURERS MARKETING ANY HOSPITAL OR MEDICAL POLICY OR CERTIFICATE SHOULD CAREFULLY REVIEW THE APPLICABLE STATUTES AND ADMINISTRATIVE RULE TO DETERMINE HOW THE REGULATIONS APPLY TO THEM.

A copy of ch. Ins 18, Wis. Adm. Code, is available at http://oci.wi.gov/rules/1800fn01.pdf.

If your company is authorized to write health insurance, it most likely will be required to offer its insureds a grievance process. The administrative rule defines grievance and provides specific requirements for the process. Insurers required to provide grievance rights must develop internal grievance procedures, include the description of the grievance process in policies and certificates, and provide notices of the grievance rights to insureds.

Insurers will be required to refile their policies and certificates.

Regarding the independent review requirement, health benefit plan has a slightly narrower definition. However, most insurers authorized to write health insurance business will be required to offer their insureds an independent review of an adverse or experimental treatment determination. This process will be fully implemented when the commissioner certifies an independent review organization.

A technical bulletin regarding ch. Ins 18, Wis. Adm. Code, will be sent to insurers offering health benefit plans when the commissioner has certified an independent review organization in accordance with s. 632.835, Stats.

PERSONS TO CONTACT FOR ADDITIONAL INFORMATION
If you have questions, please put them in writing and address them to the appropriate contact person listed below:

Telephone SolicitationsJim Rabbitt
DATCP
Default JudgementsRobert Luck
Legal Unit
Chapter 609 Defined
Network Plans
Diane Dambach
Bureau of Market Regulation
Timely payment of claims
for chiropractic services
Mike Honeck
Bureau of Market Regulation
Case characteristics and
rate regulation
Laura Iliff
Actuary
Annual Publication of RatesLaura Iliff
Actuary
Grievance procedure
Independent review
Marcia Zimmer
Barbara Belling