Updates on recent legislative and regulatory activity impacting workers' compensation pharmacy
The MyMatrixx by Evernorth Regulatory Affairs team continually tracks and monitors legislation and regulations impacting workers’ compensation pharmacy. Below are some updates on more recent developments. You can follow many of these measures and more with our online tracker.
Arizona progresses review of prescription topicals in workers’ compensation
The Arizona Industrial Commission is progressing its review of prescription topicals for potential regulation changes. The Commission held meetings with multiple stakeholders in June and October of last year to discuss the higher costs of this category of medications. MyMatrixx by Evernorth attended those meetings and met individually with the Commission to share our experience with increased costs of prescription topicals and encouraged the Commission to look at the approaches of other states to help tackle the issue.
The Commission recently shared early draft language, which would cap reimbursement for prescription topicals above a certain dollar threshold and require provider justification for going above that amount. MyMatrixx is reviewing the draft language for initial feedback. The Commission anticipates it will formally propose the amendment language later this year for potential inclusion in its annual fee schedule updates that would have a May effective date.
California DWC updates workers’ compensation treatment guidelines and UR rules
The California Division of Workers’ Compensation (DWC) adopted updates to its Medical Treatment Utilization Schedule (MTUS) guidelines, effective for services rendered on or after January 2, 2026. Adopted MTUS guidelines are presumed to be correct on the issue of extent and scope of medical treatment, and they are intended to guide the provision and authorization of treatment in the state’s workers’ comp system. The latest changes incorporate the following updated American College of Occupational and Environmental Medicine (ACOEM) guidelines:
- Shoulder Disorders Guideline (July 14, 2025)
- Elbow Disorders Guideline (July 14, 2025)
- Hand, Wrist, and Forearm Disorders Guideline (July 14, 2025)
- Traumatic Brain Injury Guideline (October 7, 2025)
In addition, following several public comment periods, utilization review (UR) rule changes adopted by the DWC were approved by the state’s Office of Administrative Law (OAL) in late December and take effect April 1, 2026. MyMatrixx contributed to the various public comment periods through our trade association.
The approved UR rule changes:
- Account for the drug formulary and prior statute changes that include an exception from UR for certain treatments provided or prescribed by predesignated or MPN/HCO physicians within the first 30 days of injury, including authorization processes and review timelines.
- Implement the existing law’s UR plan accreditation requirement and allow for the electronic submission of a Request for Authorization (RFA) via encrypted email or electronic data interchange. Please note, the DWC had originally proposed a new physician reporting form, the PR-1, which would have combined the Physician’s Progress Report and the RFA, but that idea was scrapped in the final adopted changes.
Clients should review the DWC’s published “final statement of reasons” documents to understand the updated UR Rules and their responsibilities in reviewing medical treatment, including but not limited to:
- Medications and their review timeframe limitations
- Bill denials for a prospective or retrospective review in certain scenarios
- The 30-day exception for certain providers when providing or prescribing specific types of treatment, including exempt drugs
- Consequences for non-compliance with the UR laws
Texas DWC finalizes audit of prescribing Gabapentin or Pregabalin combined with opioids and prepares for 2026 audit that may include topicals
In December 2025, the Texas Division of Workers’ Compensation (DWC) finalized an executive summary of an audit related to the practices of health care providers when prescribing Gabapentin or Pregabalin in combination with opioids. The audit’s purpose was to promote quality, cost-effective care that protects injured employees while ensuring prescribers follow the state-adopted Official Disability Guidelines (ODG) and accepted standards. It also aimed to confirm that such prescribing was supported by appropriate clinical decision making and documentation, ultimately improving return-to-work outcomes, quality of life, and preventing unnecessary disability. The executive summary includes recommendations for prescribers. The DWC reported that it found no issues requiring referral to Enforcement but did identify opportunities to improve prescribing practices and alignment with ODG.
Also, the DWC recently solicited stakeholder review and input (by January 16) of the following topics as part of its 2026 Medical Quality Review Annual Audit Plan (both audits may be conducted if resources allow):
- Evaluate the appropriateness and medical necessity for the prescribing of topical analgesics
- Evaluate peer review reports issued by Utilization Review Agents to ensure they adhere to the ODG and medically accepted standards of care for conducting UR, including the appropriate selection of reviewing health care providers
The DWC has been looking at its data on topical medications, previously noting a utilization uptick (MyMatrixx data has also shown an upward trend in costs for topicals dispensed by out-of-network pharmacies in the state). Last year, MyMatrixx provided the DWC examples of other states’ actions to address topicals in their regulations along with insight on which of the approaches might be more effective and feasible to implement. Our trade association, AAPAN, also submitted recommendations to the DWC to study topicals and other related drug cost topics. MyMatrixx supports the DWC auditing the appropriateness and medical necessity for the prescribing of these medications and will be submitting a recommendation to that effect.
Trump issues executive order to speed up marijuana rescheduling
President Donald Trump issued an executive order (EO) in December 2025 that includes a provision directing the Attorney General to take “all necessary steps” to complete the rulemaking process to reschedule marijuana to Schedule III of the Controlled Substances Act “in the most expeditious manner in accordance with Federal law.” Currently, marijuana is a federal Schedule I controlled substance, which means it is classified as a drug with a high potential for abuse, has no accepted medical use in treatment in the United States, and lacks the accepted safety for use under medical supervision.
In 2024, under the Biden administration, the Drug Enforcement Administration (DEA) issued a notice of proposed rulemaking to reschedule the drug as a Schedule III controlled substance. Schedule III drugs are classified as:
- Having a lower potential for abuse (when compared to schedules I and II drugs),
- Having an accepted medical use in treatment in the U.S., and
- May lead to moderate or low physical dependence or high psychological dependence.
Over 42,000 comments were submitted in response to that proposed DEA rulemaking.
As of today, there is no immediate impact from the EO. However, rescheduling marijuana would have broader implications beyond the workers’ compensation industry. A federal rescheduling would cause a cascade effect on the states and industry that would take time to play out, both legally and practically. It would expand the legal use of marijuana medically given several states have prohibited its use (and at times reimbursement in workers’ compensation) based on its current status as a Schedule I controlled substance federally.