The New York Workers’ Compensation Board (WCB) has adopted rule amendments, which provide a process for out-of-network pharmacy use for situations when there is a non-established condition or injury or another legal objection. These changes take effect July 11, 2025.
Current New York rules permit an employer or carrier to contract with pharmacies and require injured workers to obtain their medications from those designated pharmacies. Exceptions to using a designated pharmacy include:
- Emergencies when it is not reasonably possible to immediately obtain required prescribed medications
- A controverted claim
The Latest Adopted Rule Amendments
According to the new, adopted rule changes, a self-insured employer or carrier is required to provide written notice of a decision to not pay for a prescribed medication, which is pending resolution of a legal objection that contends:
- The medication treats a non-established body site; or
- The payer has not accepted liability for the body site or condition
Upon receipt of the written notice (assuming they were subject to a requirement to use a network pharmacy), the injured worker may use an out-of-network pharmacy while the legal objection is pending.
The rule changes also outline:
- Penalties for non-compliance
- The steps to re-notify the injured worker of the requirement to resume use of a network pharmacy after a legal objection is resolved.
- The amended process for controverted claims
In its rule adoption announcement, the WCB also provided a list of content requirements for the notice, most of which mirrors what is in the amended rules. Application of the WCB’s fee schedule(s) and formulary is also reiterated or clarified for these situations in the rules. One change from the WCB that differs from the proposal in late December, is to allow approximately 30 days from rule adoption until the regulation changes take effect for education, guidance, and programming.
Of note for employers and carriers, the amended rules provide that:
- The notice needs to be in writing and must go to the claimant, the WCB, and the independent pharmacy, pharmacy chain, or PBM designated by the carrier or employer.
- Failure of the designated pharmacy to dispense and/or failure of the self-insured employer or insurance carrier to pay for medications prior to providing the notice shall subject the employer or carrier, following a hearing, to penalties of at least $2,000, with increased penalties thereafter for any subsequent failures.
- When a claimant has been previously notified that they may use a non-designated pharmacy, following resolution of the legal objection, the employer/carrier must re-notify the claimant of the initial requirement to use a designated pharmacy in order to require a claimant to resume use of a designated pharmacy.
- In the event the claimant prevails, and the claim is established, or the legal objection is resolved in favor of the provider, the employer or carrier shall reimburse either the claimant, the pharmacy processing agent, other third party, or the unpaid pharmacy from which the claimant filled the medication in question. The reimbursement shall not exceed the maximum amount set by the fee schedule for controverted claims in existing rules (higher than the normal/standard fee schedule).
- The WCB’s formulary shall apply to prescriptions for body parts or conditions not yet accepted by the carrier or employer.
MyMatrixx by Evernorth submitted written comments to the WCB requesting clarifying language on certain aspects of the proposed rule text during the proposed rulemaking comment period. One of our requests for clarification was addressed in the response to comments and partially in the adopted text.
Moving Forward
It’s important to note there are additional anti-pharmacy network bills in New York (S 4926 and A 6887) still pending this year in the legislature. These bills are similar to S 1974, which was vetoed by Governor Kathy Hochul last year stating that the bill would have increased litigation, added bureaucratic steps for the WCB, and led to delays in obtaining needed medication.
The MyMatrixx Regulatory Affairs team continues to track legislative and regulatory actions related to pharmacy networks, as we know changes to direction of care may affect the ability of our clients and payers to leverage network pharmacies to:
- Control costs
- Ensure patient safety
- Provide access the appropriate medications for accepted workplace injuries
For more details and the status of legislation related to networks or direction of care in New York or elsewhere in the country that we are tracking, refer to our Legislative and Regulatory Policy Tracker on our Statehouse Watch webpage (select “Networks or Direction of Care” as the topic).
Questions on this topic for the MyMatrixx Regulatory Affairs team can be sent to MMXRegulatoryAffairs@MyMatrixx.com. For more information on policy developments like this in workers’ compensation impacting pharmacy in states across the country, please visit and bookmark Statehouse Watch at MyMatrixx.com.