Ins 9.01(17)(b) (b) The only direct or indirect compensation arrangement the insurer has with the provider provides for compensation that is:

Ins 9.01(17)(b)1. 1. On a fee for service basis and not on a risk sharing basis, including, but not limited to, capitation, withholds, global budgets, or target expected expenses or claims;

Ins 9.01(17)(b)2. 2. The compensation arrangement provides for compensation that is not less than 80% of the provider’s usual fee or charge.

Ins 9.01(17)(c) (c) The insurer, in any arrangement described under par. (b), requires that the reduction in fees will be applied with respect to cost sharing portions of expenses incurred under the defined network plan to the extent the provider submits the claim directly to the insurer.

Ins 9.01(17)(d) (d) The provider is not directly or indirectly managed, owned, or employed by the insurer.

Ins 9.01(17)(e) (e) The insurer does not disclose, market, advertise, provide a telephone service or number relating to, or include in policyholder or enrollee material information relating to, the availability of the compensation arrangement described under par. (b), or the names or addresses of the provider or an entity that maintains a compensation arrangement described under par. (b), except to the extent required by law in processing of explanation of benefits. The insurer may not indirectly cause or permit a prohibited disclosure and may not make any such disclosure in the course of utilization review or pre-authorization functions.

Ins 9.01 History History: Cr. Register, February, 2000, No. 530, eff. 3-1-00; correction in (12) made under s. 13.93 (2m) (b) 7., Stats., Register February 2006 No. 602; CR 05-059: renum. (12) to be (3m), am. (3), (3m), (5), (13), (17) (a) and (c), cr. (9m), (10m) and (14m) Register February 2006 No. 602, eff. 3-1-06; CR 06-083: am. (5), (9m) and (13), r. (10m) Register December 2006 No. 612, eff. 1-1-07; correction in (9) made under s. 13.92 (4) (b) 7., Stats., Register February 2013 No. 686; CR 19-036: am. (3m) Register December 2019 No. 768, eff. 1-1-20; correction in (3m) made under s. 35.17, Stats., Register December 2019 No. 768.

Ins 9.015 Ins 9.015 Scope. This chapter applies to all insurers offering a defined network plan, a preferred provider plan or a limited service health organization plan except to an insurer offering a preferred provider plan that also meets the subject matter of s. 632.745 (11) (b) 9., Stats.

Ins 9.015 History History: CR 06-083: cr. Register December 2006 No. 612, eff. 1-1-07.

subch. II of ch. Ins 9 Subchapter II — Financial Standards for Health Maintenance Organizations or Limited Service Health Organizations

Ins 9.02 Ins 9.02 Purpose. This subchapter establishes financial standards for health maintenance organizations and limited service health organizations doing business in Wisconsin. These requirements are in addition to any other statutory or administrative rule requirements that apply to health maintenance organizations and limited service health organizations.

Ins 9.02 History History: Cr. Register, February, 2000, No. 530, eff. 3-1-00.

Ins 9.03 Ins 9.03 Scope. This subchapter applies to all insurers writing health maintenance organization or limited service health organization business in this state.

Ins 9.03 History History: Cr. Register, February, 2000, No. 530, eff. 3-1-00.

Ins 9.04 Ins 9.04 Financial requirements. The following are the minimum financial requirements for compliance with this section unless a different amount is ordered by the commissioner:

Ins 9.04(1) (1) Capital. Unless otherwise ordered by the commissioner the minimum capital or permanent surplus of:

Ins 9.04(1)(a) (a) A health maintenance organization insurer first licensed or organized on or after July 1, 1989, is $750,000;

Ins 9.04(1)(b) (b) A health maintenance organization insurer first licensed or organized prior to July 1, 1989, is $200,000;

Ins 9.04(1)(c) (c) The minimum capital or permanent surplus requirement for an insurer licensed to write only limited service health organization business shall be not less than $75,000. The commissioner may accept the deposit or letter of credit under sub. (3) to satisfy the minimum capital or permanent surplus requirement under this par. (c), if the insurer licensed to write only limited service health organization business demonstrates to the satisfaction of the commissioner that it does not retain any risk of financial loss because all risk of loss has been transferred to providers through provider agreements.

Ins 9.04(1)(d) (d) Any other insurer writing health maintenance organization or limited service health organization business, is the amount of capital or required surplus required under the statutes governing the organization of the insurer.

Ins 9.04(2) (2) Compulsory surplus.

Ins 9.04(2)(a) (a) An insurer, including an insurer organized under ch. 613, Stats., writing health maintenance organization or limited service health organization business, except for a health maintenance organization insurer or an insurer licensed to write only limited service health organization business, is subject to s. Ins 51.80.

Ins 9.04(2)(b) (b) A health maintenance organization insurer shall maintain a compulsory surplus as follows, or a greater amount required by order of the commissioner: the greater of $750,000 or an amount equal to the sum of:

Ins 9.04(2)(b)1. 1. 10% of premiums earned in the previous 12 months for policies that include coverages that are considered other insurance business under s. 609.03 (3) (a) 3., Stats., plus;

Ins 9.04(2)(b)2. 2. 3% of other premiums earned in the previous 12 months except that if the percentage of the liabilities of the health maintenance organization insurer that are covered liabilities is less than 90%, 6% of other premiums earned in the previous 12 months.

Ins 9.04(2)(c) (c) Each insurer licensed to write only limited service health organization business shall maintain a compulsory surplus to provide security against contingencies that affect its financial position but which are not fully covered by provider contracts, insolvency insurance, reinsurance, or other forms of financial guarantees. The compulsory surplus shall be the greater of 3% of the premiums earned by the limited service health organization in the previous 12 months, or $75,000.

Ins 9.04(2)(d) (d) The commissioner may accept a deposit of securities or letter of credit with the same terms and conditions as required under sub. (3) to satisfy the compulsory surplus requirement if the limited service health organization demonstrates to the satisfaction of the commissioner that it does not retain any risk of financial loss because all risk of loss has been transferred to providers through provider agreements. The commissioner may, by order, require a higher or lower compulsory surplus or may establish additional factors for determining the amount of compulsory surplus required for a particular limited service health organization.

Ins 9.04(3) (3) Deposit or letter of credit. Each limited service health organization shall maintain either a deposit of securities with the state treasurer or an acceptable letter of credit on file with the commissioner’s office. The amount of the deposit or letter of credit shall be not less than $75,000 for limited service health organizations. The letter of credit shall be payable to the commissioner whenever rehabilitation or liquidation proceedings are initiated against the limited service health organization.

Ins 9.04(4) (4) Risks. Risks and factors the commissioner may consider in determining whether to require greater compulsory surplus by order include, but are not limited to, those described under s. 623.11 (1) (a) and (b), Stats., and the extent to which the insurer effectively transfers risk to providers. A health maintenance organization insurer may transfer risk through any mechanism including, but not limited to, those provided under s. Ins 9.05 (4).