Chapter 648

648.35(3) (3) Compulsive forfeitures. If a person does not comply with an order issued under s. 648.10 (2) within 2 weeks after the commissioner has given the care management organization notice of the commissioner’s intention to proceed under this subsection, the commissioner may commence an action for a forfeiture in such sum as the court considers just, but not exceeding $5,000 for each day that the violation continues after the commencement of the action until judgment is rendered. No forfeiture may be imposed under this subsection if at the time the action was commenced the care management organization was in compliance with the order, nor for any violation of an order occurring while any proceeding for judicial review of the order was pending, unless the court in which the proceeding was pending certifies that the claim of invalidity or nonapplicability of the order was frivolous or a sham. If after judgment is rendered the care management organization does not comply with the order, the commissioner may commence a new action for a forfeiture and may continue commencing actions until the person complies. The proceeds of all actions under this subsection, after deduction of the expenses of collection, shall be paid into the common school fund of the state.

648.35(4) (4) Forfeitures and civil penalties.

648.35(4)(a) (a) Restitutionary forfeiture. Whoever violates an order issued under s. 648.10 (2) that is effective under s. 601.63, any section of this chapter, or any rule relating to this chapter shall forfeit to the state twice the amount of any profit gained from the violation, in addition to any other forfeiture or penalty imposed.

648.35(4)(b) (b) Forfeiture for violation of order. Whoever violates an order issued under s. 648.10 (2) that is effective under s. 601.63 shall forfeit to the state not more than $1,000 for each violation. Each day that the violation continues is a separate offense.

648.35(4)(c) (c) Forfeiture for violation of statute or rule. Whoever violates, intentionally aids in violating, or knowingly permits a person over whom he or she has authority to violate a section of this chapter or a rule promulgated under this chapter shall forfeit to the state not more than $1,000 for each violation. If the section or rule violated imposes a duty to make a report to the commissioner, each week of delay in complying with the duty is a new violation.

648.35(4)(d) (d) Procedure. The commissioner may order any person to pay a forfeiture imposed under this subsection, which shall be paid into the common school fund. If the order is issued without a hearing, the affected person may demand a hearing through procedures described under s. 601.62 (3) (a). If the person fails to request a hearing, the order is conclusive as to the person’s liability. The scope of review for forfeitures ordered is that specified under s. 227.57. The commissioner may cause an action to be commenced to recover the forfeiture. Before an action is commenced, the commissioner may compromise the forfeiture.

648.35(5) (5) Criminal penalty. Whoever intentionally violates or intentionally permits any person over whom he or she has authority to violate or intentionally aids any person in violating any section of this chapter, any rule promulgated to administer this chapter, or any order issued under s. 648.10 (2) that is effective under s. 601.63 is guilty of a Class I felony, unless a specific penalty is provided elsewhere in the statutes. Intent has the meaning expressed under s. 939.23.

648.35 History History: 2009 a. 28.

648.45 648.45 Affiliates of permittee.

648.45(1) (1) Information. A permittee and a person attempting to acquire or having control of a permittee, shall report to the commissioner the information concerning the permittee, its affiliates, and the person attempting to acquire control of the permittee that the commissioner requires by rule. The commissioner may promulgate rules prescribing the timing of reports under this subsection, including requiring periodic reporting and the form and procedure for filing reports.

648.45(2) (2) Report for affiliates. The permittee may report on behalf of all affiliated entities if it provides all the information that would be required if each affiliate reported separately.

648.45(3) (3) Consent to jurisdiction. Every permittee shall promptly submit to the commissioner a statement from each of its affiliates that the affiliate agrees to be subject to the jurisdiction of the commissioner and the courts of this state for the purposes of this chapter. A governmental unit is not subject to this requirement. The commissioner may exempt other affiliates from this subsection.

648.45(4) (4) Information order. The commissioner may, by order, require any permittee or any person attempting to acquire or having control of the permittee, to report information under sub. (1) or other information to the commissioner.

648.45(5) (5) Transactions with affiliates. Neither a permittee nor an affiliate of the permittee may enter into a transaction between the permittee and affiliate unless all of the following apply:

648.45(5)(a) (a) The transaction at the time it is entered into is reasonable and fair to the interests of the permittee.

648.45(5)(b) (b) The books, accounts, and records of each party to the transaction are kept in a manner that clearly and accurately discloses the nature and details of the transaction and, in accordance with generally accepted accounting principles, permits ascertainment of charges relating to the transaction.

648.45(5)(c) (c) The permittee’s financial condition following any dividends or distributions to shareholders or a person having control of the permittee is reasonable in relation to the permittee’s outstanding liabilities and is adequate to its financial needs.

648.45(5)(d) (d) The transaction complies with any other standard that the commissioner, after consulting with the department, prescribes by rule.

648.45(6) (6) Transactions subject to disclosure.

648.45(6)(a) (a) Affiliated transactions to be reported.

648.45(6)(a)1. 1. The commissioner, after consulting with the department, may promulgate rules requiring a permittee, a person attempting to acquire or having control of a permittee, and affiliates of a permittee to report a transaction or a group or series of transactions, if all of the following are satisfied:

648.45(6)(a)1.a. a. The transaction is between a permittee and a person attempting to acquire or having control of the permittee or an affiliate of the permittee, or the transaction directly or indirectly benefits the person or affiliate.

648.45(6)(a)1.b. b. The transaction is, or the group or series of transactions are, material to the permittee.

648.45(6)(a)2. 2. Transactions that are material to a permittee for the purposes of subd. 1. include management contracts, service contracts, and cost-sharing arrangements. The commissioner, after consulting with the department, may prescribe by rule standards for determining whether a transaction is material under this subsection.

648.45(6)(a)3. 3. No permittee, person attempting to acquire or having control of a permittee, or affiliate of the permittee may enter into a transaction required to be reported to the commissioner under this subsection unless the permittee, person, and affiliate report the transaction to the commissioner in the form and by the date before the effective date of the transaction that are prescribed by the commissioner by rule, after consulting with the department. The commissioner may not require the transaction to be reported earlier than 30 days before the effective date of the transaction.

648.45(6)(b) (b) Disapproval. The commissioner may, within the period prescribed in par. (a) 3., disapprove any transaction reported under par. (a) if the commissioner finds, after consulting with the department, that it would violate the law or would be contrary to the interests of enrollees of the permittee, the department, or the public.

648.45(6)(c) (c) Transactions prohibited. No permittee, person attempting to acquire or having control of the permittee, or affiliate of the permittee may enter into a transaction that is not reported as required under par. (a) or that is disapproved by the commissioner under par. (b).

648.45(6)(d) (d) Voidable transactions. If a permittee, person attempting to acquire or having control of the permittee, or affiliate enters into a transaction in violation of this section, the permittee may void the transaction, obtain an injunction, and recover from the person or affiliate the amount necessary to restore the permittee to its condition had the transaction not occurred. The commissioner may order a permittee to void the transaction, to commence an action against the person or affiliate, or to take other action.

648.45(6)(e) (e) Required financial conditions. The commissioner, after consulting with the department, may promulgate rules for determining adequacy of financial condition under this section.

648.45(6)(f) (f) Exemption if permittee reports. Paragraph (a) does not apply to a person attempting to acquire or having control of, or an affiliate of, a permittee, if the permittee reports on behalf of the person or on behalf of the affiliate, and the transaction is not disapproved by the commissioner under par. (b).

648.45(7) (7) Dividends and distributions.

648.45(7)(a) (a) A permittee may not pay a dividend or distribution, and an affiliate of a permittee may not accept a dividend or distribution, unless the permittee reports the dividend or distribution to the commissioner at least 30 days before payment and the commissioner does not disapprove the dividend or distribution within that period.

648.45(7)(b) (b) The commissioner, after consulting with the department, may promulgate rules under this section that do any of the following:

648.45(7)(b)1. 1. Prescribe the form and content of and procedure for filing reports under this subsection.

648.45(7)(b)2. 2. Exempt dividends or distributions from the reporting requirement under par. (a) under conditions that the commissioner determines will not jeopardize the financial condition of the permittee.

648.45(7)(c) (c) A permittee may declare a dividend or distribution that is conditioned upon the permittee’s compliance with this subsection. A declaration of a dividend or distribution under this subsection does not confer rights to the proposed recipient of the dividend or distribution unless this subsection is complied with and is void if the dividend or distribution is disapproved by the commissioner under par. (a).

648.45(7)(d) (d) In addition to any other remedies available, a permittee may recover from the recipient any dividend or distribution paid in violation of this subsection.

648.45(8) (8) Duties of officers and directors.

648.45(8)(a) (a) No director or officer of a permittee or of an affiliate of a permittee may permit, participate in, or assent to a transaction or payment or acceptance of a dividend or distribution prohibited under this chapter.

648.45(8)(b) (b) An officer or director of a permittee or of an affiliate of a permittee who knows, or reasonably should know, that the permittee or affiliate has entered into a transaction or paid a dividend or distribution that violates this chapter shall report the transaction, dividend, or distribution to the commissioner in writing within 30 days after attaining that knowledge. Section 648.15 (6) applies to a report under this section, and the report is confidential unless the commissioner finds it necessary to disclose the report for the purpose of enforcing this chapter.

648.45 History History: 2009 a. 28; 2011 a. 257 s. 56.

648.50 648.50 Management changes.

648.50(1) (1) Approval required. No proposed plan of merger or other plan for acquisition of control of a permittee may be executed unless the commissioner, after consulting with the department, approves the plan.

648.50(2) (2) Grounds for approval. The commissioner shall approve the plan under this section if the commissioner finds, after a hearing, that it would not violate the law or be contrary to the interests of the public, the department, or the enrollees.

648.50(3) (3) Information required. A permittee shall report to the commissioner any changes in directors or principal officers after a permit is issued, together with biographical data on the new director or officer that the commissioner requires by rule.

648.50 History History: 2009 a. 28.

648.55 648.55 Commissioner’s summary orders.

648.55(1) (1) The commissioner, after consulting with the department, may make and serve an order on a permittee, requiring it to stop providing services under the department contract, or to take corrective measures, without notice and before hearing, if it appears to the commissioner that irreparable harm to the property or business of the permittee or to the interests of its enrollees or the public, will occur unless the commissioner acts with immediate effect and one of the following applies:

648.55(1)(a) (a) The permittee is not in compliance with a rule establishing standards for the financial condition of care management organizations.

648.55(1)(b) (b) Grounds exist to suspend or revoke the permittee’s permit.

648.55(2) (2) An order issued under this subsection is effective immediately.

648.55(3) (3) The permittee has the rights provided under s. 601.62. The commissioner may serve upon the permittee notice of hearing under the procedures under s. 601.62 simultaneously with service of the order under sub. (1).

648.55(4) (4) The commissioner may keep proceedings under this section confidential.

648.55 History History: 2009 a. 28.

648.65 648.65 Enrollee immunity.

648.65(1) (1) Immunity. An enrollee of a care management organization is not liable for health care, service, equipment, or supply charges that are covered under the care management organization’s contract with the department.

648.65(2) (2) Prohibited recovery attempts. No person may bill, charge, collect a deposit from, seek compensation from, file or threaten to file with a credit reporting agency with respect to, or have any recourse against an enrollee or any person acting on the enrollee’s behalf, for any health care, service, equipment, or supply charges for which the enrollee or person acting on his or her behalf is not liable under sub. (1).

648.65(3) (3) Immunity not affected. The immunity of an enrollee under subs. (1) and (2) is not affected by any of the following:

648.65(3)(a) (a) A breach or default on an agreement by the care management organization or the failure of any person to compensate the provider.

648.65(3)(b) (b) The insolvency of the care management organization or any person contracting with the care management organization or the commencement or the existence of conditions permitting the commencement of insolvency, delinquency, or bankruptcy proceedings involving the care management organization or other person, regardless of whether the care management organization or other person has agreed to compensate, directly or indirectly, the provider for health care, services, equipment, or supplies for which the enrollee is not liable under sub. (1)

648.65(3)(c) (c) The inability of the provider or other person who is owed compensation for health care, services, equipment, or supplies to obtain compensation from the care management organization.

648.65 History History: 2009 a. 28.

648.75 648.75 Insolvency funding.

648.75(1) (1) Deposit required. A permittee shall deposit an amount established by the contract with the department, and not less than $250,000, using the procedures under s. 601.13.

648.75(2) (2) Release of deposit. A deposit under this section may be released only with the approval of the commissioner, after consulting with the department, by the procedures under s. 601.13 (10) and only in one of the following circumstances:

648.75(2)(a) (a) To pay an assessment under sub. (3).

648.75(2)(b) (b) To pay creditors of the permittee according to the priority determined by the department if the permittee is insolvent, dissolves, or is subject to an insolvency proceeding, including a bankruptcy proceeding.

648.75(3) (3) Assessment. The department may assess an amount from each permittee’s deposit for the purpose of funding arrangements for, or to pay expenses related to, services for enrollees of an insolvent or financially hazardous permittee. The department’s assessment shall be allocated to each permittee’s deposit in an amount that reflects the permittee’s proportionate share of projected enrollment in the department’s annual contracting period. The commissioner may authorize release, and the department of administration shall pay to the department the assessed amount for the purposes of this subsection.

648.75(4) (4) Restoration. A permittee shall restore its deposit that is subject to an assessment under sub. (3) within 30 days after the assessment, unless the office, after consulting with the department, authorizes a longer period, which shall not exceed 2 years.

648.75(5) (5) Recovery. The department may recover, and may file a claim or bring civil action to recover, from the insolvent or financially hazardous permittee any amount that the department assesses and pays under sub. (3). Any amount recovered shall be restored to each permittee’s deposit in the same proportion as the assessment.

648.75 History History: 2009 a. 28.