Regulatory Recap – April 7, 2014


In This Issue

Legislation Enacted
Active Legislation
Regulatory Overview


The legislative clock has expired in some states and is ticking in others. In seven states the legislative session and deadline for governor action has expired (ID, IN, NM, SD, UT, WV and WY)). The Legislative session has ended in an additional eight states, but as of early April the governor’s deadline act has not yet passed (AR, GA, OR, VA, and WA).

Legislation Enacted in 2014:

Physician Dispensing:

Indiana:  SB 294, effective 7/1/2014, limits physician dispensing in workers’ compensation. The bill provides that: (1) a medical service provider may not be reimbursed for more than one office visit for each repackaged legend drug prescribed, (2) the maximum period during which a medical service provider that is not a retail or mail order pharmacy may receive reimbursement for a repackaged legend drug begins on the date of the injury or disablement and ends at the beginning of the eighth day after the date of the injury or disablement.

Utah:  Though very limited, physician dispensing in Utah is expanding. SB 55 removes the exemption from the Pharmacy Practice Act for medical practitioners to dispense a cosmetic drug, a cancer drug treatment regimen, or a prepackaged drug at an employer sponsored clinic. Prepackaged drug is defined as a drug that is not listed as a Schedule I, II, III, IV, or V drug and is packaged in a fixed quantity per package by the drug manufacturer, a pharmacy wholesaler or distributor, or a pharmacy licensed under Utah law.

Prescription Drug Monitoring Programs:

District of Columbia:  Add them  to your list of states with a law creating a PDMP.

Idaho:  HB 396, effective July 1, 2014, requires prescribers of controlled substances to register with the state’s Controlled Substances Prescription Database.

Utilization Review:

Washington:  SB 6511 requires the insurance commissioner to establish a work group to develop recommendations for requirements for prior authorization of health care services, including pharmacy issues. The state is expected to push for workers’ compensation to conform.

Active Legislation:

Fee Schedules:

Alaska:  HB 316 would eliminate the current usual, customary and reasonable fee schedule and replace it with a schedule set by the Workers’ Compensation Board. The board would base its fee schedule on Medicaid and Medicare rates and further adjust costs to reflect the market by setting a conversion rate. The benchmark for prescription drugs would be “manufacturer’s invoice” rather than the current AWP benchmark.

Physician Dispensing:

Pennsylvania:  On April 2, 2014, the House Labor and Industry Committee amended and then passed HB 1846. As amended, the bill:

  • limits physician dispensing to an initial 15-day supply, commencing with the employee’s initial treatment following injury;
  • caps reimbursement at 100% of average wholesale price (AWP);
  • requires the original NDC on the invoice and allows use of least expensive clinically equivalent drug if original NDC not provided; and,
  • limits reimbursement for over-the-counter drugs to pharmacies.


Hawaii:  SB 2365 would set payment for all forms of prescription drugs, including repackaged and relabeled, at 140% of the average wholesale price for the underlying drug. Compounded prescription drug payment shall not exceed 140% of the AWP by gram weight of each underlying prescription drug contained in the compound. The bill also provides that payment for a prescription drug that is not available at a retail pharmacy within the state will not be reimbursed. This bill has passed the Senate and the House Committee on Finance as of 3/27/2014. The Department of Commerce and Consumer Affairs testified in support of this bill that clarifies reimbursement for repackaged, relabeled, and compounded medications, which are not now addressed in workers’ compensation rules and regulations.

Tennessee:  HB 1512 bill prohibits a medical practitioner, except for personnel working at a pain management clinic, from distributing a controlled substance listed under Schedule II or III. There are certain exceptions to the restriction such as allowing dispensing in connection with the performance of a surgical procedure and the drugs are not dispensed more than 14 days after the procedure. This bill is still in House Committee.


Vermont:  HB 645 directs the Commissioner of Labor to adopt rules, consistent with the best practices, governing the prescription of opioids, including patient screening and drug screening for patients prescribed opioids for chronic pain. The Commissioner is specifically directed to consider ACOEM’s guidelines. This bill has passed the House.


New Hampshire:  HB 1615 allows a pharmacist to dispense a one-time emergency supply of a prescribed medication if unable to obtain approval because the insurer or pharmacy benefit manager requires prior authorization. If authorization is denied, the insurer or pharmacy benefit manager will reimburse the pharmacist for the prescription as given based on their contractual arrangement. This bill passed the House on 3/25/2014.

PBM Regulation:

Several states have proposed legislation requiring maximum allowable pricing to be included in contracts between PBMs and pharmacies. States with legislation likely to encompass workers’ compensation PBMs include Colorado — HB 1213, Florida — HB 765 and SB 1014, Louisiana – SB 410, Maryland —HB 793 and SB 952.

Regulatory Overview

Florida:  The Florida Division of Workers’ Compensation conducted a public meeting on April 1, 2014 to gather comments on electronic billing policies for payors and payees, the Florida Workers’ Compensation Uniform Medical Treatment/Status Reporting Form (DWC-25) and possible changes to the Ambulatory Surgical Center Reimbursement Manual.

California:  The 15 day public comment period on the revised California Medical Provider Network (MPN) regulations ended March 25, 2014. The proposed rules expand the definition of “ancillary services” to include pharmaceutical services, interpreter services and physical therapy.

Texas:  The Texas Department of Insurance’s WC Research and Evaluation Group on March 21, 2014, released an updated preliminary report on the impact of the pharmacy closed formulary.