AB 554

Under current law, as a condition of doing business in this state, certain payers

of health care benefits (called third parties) must provide to the Department of

Health Services (DHS) information from their records to enable DHS to ascertain

whether an individual, or his or her spouse or dependent, who has been or is a

recipient under an assistance program, has received or is receiving health care

coverage or benefits from a third party. The assistance programs for which DHS

seeks information about recipients are the Medical Assistance (MA) program,

including the Badger Care health care program, Family Care, Senior Care, the

Well-Woman Program, and the program that provides financial assistance for the

cost of medical care to persons with chronic kidney disease, cystic fibrosis, and

hemophilia. The third parties may receive compensation for providing the

information, must provide the information within certain deadlines, and may be

subject to enforcement proceedings for noncompliance. The third parties must

accept assignment to DHS of a recipient's right to receive payment from the third

party for a health care item or service for which payment under an assistance

program has been made, as well as the right of DHS to recover any third-party

payment made for which assignment had not been accepted, and may not deny a

DHS claim on the basis of certain circumstances, if submitted less than 36 months

after the health care item or service is provided and if action by DHS to enforce its

rights is commenced less than 72 months after DHS submits the claim.

This bill makes modifications to the third parties that are required to provide

information to DHS and from which DHS may recover payments for health care

services provided to recipients. Under current law, a third party is defined as an

insurer, an employee benefit plan, a service benefit plan, or a pharmacy benefits

manager. A service benefit plan, which is a plan providing health care benefits to

federal government employees, is defined by a reference to federal law. The bill

corrects the federal law citation for the definition. An employee benefit plan is also

defined by a reference to federal law. The bill changes the federal law citation so that

government-provided health care plans, which are exempted under the current law

definition, are included. The bill also changes the definition of a pharmacy benefits

manager, which, under current law, includes a person that performs pharmacy

benefits management functions with respect to prescription drug benefits that are

provided by a nonprofit hospital, an employer, a labor union, or another organization.

The bill redefines a pharmacy benefits manager simply as an entity that administers

or manages prescription drug benefits provided by an insurer or other third party.

Finally, the bill adds three other types of third parties: an issuer of a health

insurance policy (called disability insurance policy in the statutes); a group health

plan, which is a health care plan that provides medical services, directly or through

insurance or reimbursement or otherwise, to employees, and specifically includes a

self-insured plan; and an entity that administers benefits on behalf of another