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Wisconsin Legislature: SB1097: Bill Text
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SB1097: Bill Text
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2025 - 2026 LEGISLATURE
LRB-6043/1
EKL:cjs
2025 SENATE BILL 1097
March 4, 2026 - Introduced by Senators
Drake
,
Roys
and
Spreitzer
, cosponsored by Representatives
Anderson
,
Brown
,
Emerson
,
Joers
,
Kirsch
,
Neubauer
,
Palmeri
,
Roe
,
Sinicki
,
Stubbs
,
Udell
and
Clancy
. Referred to Committee on Insurance, Housing, Rural Issues and Forestry.
SB1097,1,4
1
An Act
to amend
15.01 (6), 20.145 (1) (g) 1. and 601.45 (1);
to create
15.732,
2
601.25 and 601.455 of the statutes;
relating to:
insurer claims denial
3
practices and auditing, creating the Office of the Public Intervenor, granting
4
rule-making authority, and making an appropriation.
Analysis by the Legislative Reference Bureau
This bill imposes upon insurers certain requirements for health insurance claims processing and denials. These include requirements to process claims within a reasonable time frame that prevents an undue delay in care, to provide a detailed explanation of a claim denial, and to disclose whether the insurer uses artificial intelligence or algorithmic decision-making in processing claims.
The bill also prohibits certain actions by an insurer with respect to health insurance claims. Prohibited actions under the bill include using vague or misleading terms to deny a claim, stalling review of a claim to avoid timely payment, allowing non-physician personnel to determine whether care is medically necessary, mandating prior approval for routine or urgent procedures in a manner that causes harmful delays, or requiring an insured to fail a cheaper treatment before approving coverage for necessary care.
The bill directs insurers to annually publish a report about their claim denials for health insurance policies and their use of artificial intelligence or algorithmic decision-making in processing claims for health insurance policies. The bill also directs the commissioner of insurance to maintain a public database of insurers’ health insurance claim denial rates and the outcomes of independent reviews of adverse actions under health insurance policies.
In addition, the bill authorizes the commissioner of insurance to audit insurers that deny health insurance claims with such frequency as to indicate a general business practice. Under the bill, the commissioner may collect any relevant information from an insurer necessary to conduct an audit; contract with a third party to conduct an audit; order an insurer to comply with a corrective action plan based on the findings of an audit; and impose forfeitures or sanctions on an insurer that fails to comply with a corrective action plan. The bill also requires insurers to provide a written response to any adverse findings of an audit.
Finally, the bill creates the Office of the Public Intervenor attached to the Office of the Commissioner of Insurance. Under the bill, the Office of the Public Intervenor assists individuals with claims, policies, appeals, and other legal actions related to pursuing insurance coverage for medical procedures, prescription medications, and other health care services. The bill provides that, in addition to the rights insureds have under current law to request an independent review of certain adverse actions under a health insurance policy, insureds also have the right to request from the Office of the Public Intervenor a review of any health insurance claim denial. The bill authorizes the Office of the Public Intervenor to levy an assessment on insurance providers based upon their premium volume for health insurance policies written in the state.
For further information see the state fiscal estimate, which will be printed as an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:
SB1097,1
1
Section
1
.
15.01 (6) of the statutes is amended to read:
SB1097,3,6
2
15.01
(6)
“Division,” “bureau,” “section,” and “unit” means the subunits of a
3
department or an independent agency, whether specifically created by law or
4
created by the head of the department or the independent agency for the more
5
economic and efficient administration and operation of the programs assigned to
6
the department or independent agency. The office of credit unions in the
7
department of financial institutions, the office of the inspector general in the
8
department of children and families, the office of the inspector general in the
9
department of health services,
the office of the public intervenor in the office of the
1
commissioner of insurance,
and the office of children’s mental health in the
2
department of health services have the meaning of “division” under this subsection.
3
The office of the long-term care ombudsman under the board on aging and long-
4
term care and the office of educational accountability and the office of literacy in
5
the department of public instruction have the meaning of “bureau” under this
6
subsection.
SB1097,2
7
Section
2
.
15.732 of the statutes is created to read:
SB1097,3,10
8
15.732
Same; attached office.
(1)
Office of the public intervenor.
9
There is created an office of the public intervenor which is attached to the office of
10
the commissioner of insurance under s. 15.03.
SB1097,3
11
Section
3
.
20.145 (1) (g) 1. of the statutes is amended to read:
SB1097,3,14
12
20.145
(1)
(g) 1. All moneys received under ss.
601.25 (2),
601.31, 601.32,
13
601.42 (7), 601.45, and 601.47 and by the commissioner for expenses related to
14
insurance company restructurings, except for restructurings specified in par. (h).
SB1097,4
15
Section
4
.
601.25 of the statutes is created to read:
SB1097,3,19
16
601.25
Office of the public intervenor.
(1)
The office of the public
17
intervenor shall assist individuals with insurance claims, policies, appeals, and
18
other legal actions to pursue insurance coverage for medical procedures,
19
prescription medications, and other health care services.
SB1097,3,24
20
(2)
The office of the public intervenor may levy an assessment on each insurer
21
that is authorized to engage in the business of insurance in this state. The
22
assessment levied under this subsection shall be based on the insurer’s premium
23
volume for disability insurance policies, as defined in s. 632.895 (1) (a), written in
24
this state.
SB1097,4,2
1
(3)
The commissioner may provide by rule for the governance, duties, and
2
administration of the office of the public intervenor.
SB1097,5
3
Section
5
.
601.45 (1) of the statutes is amended to read:
SB1097,4,12
4
601.45
(1)
Costs to be paid by examinees.
The reasonable costs of
5
examinations and audits under ss. 601.43, 601.44,
601.455,
and 601.83 (5) (f) shall
6
be paid by examinees except as provided in sub. (4), either on the basis of a system
7
of billing for actual salaries and expenses of examiners and other apportionable
8
expenses, including office overhead, or by a system of regular annual billings to
9
cover the costs relating to a group of companies, or a combination of such systems,
10
as the commissioner may by rule prescribe. Additional funding, if any, shall be
11
governed by s. 601.32. The commissioner shall schedule annual hearings under s.
12
601.41 (5) to review current problems in the area of examinations.
SB1097,6
13
Section
6
.
601.455 of the statutes is created to read:
SB1097,4,15
14
601.455
Fair claims processing, health insurance transparency, and
15
claim denial rate audits.
(1)
Definitions.
In this section:
SB1097,4,21
16
(a) “Claim denial” means the refusal by an insurer to provide payment under
17
a disability insurance policy for a service, treatment, or medication recommended
18
by a health care provider. “Claim denial” includes the prospective refusal to pay for
19
a service, treatment, or medication when a disability insurance policy requires
20
advance approval before a prescribed medical service, treatment, or medication is
21
provided.
SB1097,4,22
22
(b) “Disability insurance policy” has the meaning given in s. 632.895 (1) (a).
SB1097,4,23
23
(c) “Health care provider” has the meaning given in s. 146.81 (1) (a) to (p).
SB1097,5,2
24
(2)
Claims processing.
(a) Insurers shall process each claim for a disability
1
insurance policy within a time frame that is reasonable and prevents an undue
2
delay in an insured’s care, taking into account the medical urgency of the claim.
SB1097,5,6
3
(b) If an insurer determines additional information is needed to process a
4
claim for a disability insurance policy, the insurer shall request the information
5
from the insured within 5 business days of making the determination and shall
6
provide at least 15 days for the insured to respond.
SB1097,5,7
7
(c) All claim denials shall include all of the following:
SB1097,5,9
8
1. A specific and detailed explanation of the reason for the denial that cites
9
the exact medical or policy basis for the denial.
SB1097,5,12
10
2. A copy of or a publicly accessible link to any policy, coverage rules, clinical
11
guidelines, or medical evidence relied upon in making the denial decision, with
12
specific citation to the provision justifying the denial.
SB1097,5,15
13
3. Additional documentation, medical rationale, or criteria that must be met
14
or provided for approval of the claim, including alternative options available under
15
the policy.
SB1097,5,18
16
(d) If an insurer uses artificial intelligence or algorithmic decision-making in
17
processing a claim for a disability insurance policy, the insurer must notify the
18
insured in writing of that fact. The notice shall include all of the following:
SB1097,5,21
19
1. A disclosure that artificial intelligence or algorithmic decision-making was
20
used at any stage in reviewing the claim, even if a human later reviewed the
21
outcome.
SB1097,5,24
22
2. A detailed explanation of how the artificial intelligence or algorithmic
23
decision-making reached its decision, including any factors the artificial
24
intelligence or algorithmic decision-making weighed.
SB1097,6,2
1
3. A contact point for requesting a human review of the claim if the claim was
2
denied.
SB1097,6,5
3
(3)
Independent review of denials.
In addition to an insured’s right to an
4
independent review under s. 632.835, as applicable, insureds have the right to
5
request a review by the office of the public intervenor of any claim denial.
SB1097,6,7
6
(4)
Prohibited practices.
An insurer may not do any of the following with
7
respect to a disability insurance policy:
SB1097,6,8
8
(a) Use vague or misleading policy terms to justify a claim denial.
SB1097,6,9
9
(b) Fail to provide a specific and comprehensible reason for a claim denial.
SB1097,6,11
10
(c) Cancel coverage under the policy after a claim is submitted due to alleged
11
misstatements on the policy application.
SB1097,6,13
12
(d) Deny a claim based on hidden or ambiguous exclusions in a disability
13
insurance policy.
SB1097,6,14
14
(e) Stall review of a claim to avoid timely payment.
SB1097,6,16
15
(f) Reject a claim without reviewing all relevant medical records or consulting
16
qualified experts.
SB1097,6,18
17
(g) Fail to properly review or respond to an insured’s appeal in a timely
18
manner.
SB1097,6,20
19
(h) Allow non-physician personnel to determine whether care is medically
20
necessary.
SB1097,6,22
21
(i) Apply different medical necessity criteria based on financial interests
22
rather than patient needs.
SB1097,6,24
23
(j) Disregard a treating health care provider’s medical assessment without a
24
valid clinical reason.
SB1097,7,2
1
(k) Mandate prior approval for routine or urgent procedures in a manner that
2
causes harmful delays.
SB1097,7,5
3
(L) For a disability insurance policy that provides coverage of emergency
4
medical services, refuse to cover emergency medical services provided by out-of-
5
network providers.
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