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.
Colorado proposed updates to utilization standards and medical fee schedule rules
The Colorado Division of Workers’ Compensation (DWC) proposed the following updates to its Rule 16 (utilization standards) and Rule 18 (medical fee schedule).
Rule 18 amendments include substantive pharmaceutical-related changes.
Compounded Medications:
- Expands the current reimbursement cap provisions to all non-sterile compounded medications and requires that no appropriate FDA-approved commercially available alternative be available
- Requires compounding to comply with applicable state and federal law.
Topical Medications:
- Strengthens prior authorization requirements for combination topical agents, patches, and other products when lower-cost therapeutically equivalent prescription or over-the-counter alternatives exist
- Adds documentation requirements for failed alternative therapies
- Limits reimbursement for certain topical products without prior authorization
Additional changes add billing guidance for physician-dispensed and repackaged drugs, clarify that the pharmaceutical fee schedule applies to all dispensing providers regardless of location, and update acute opioid prescribing guidance to be more be consistent with state-wide guidance.
Rule 16 amendments would:
- Require faxes containing protected health information to comply with applicable HIPAA and privacy laws and that parties implement reasonable safeguards against unauthorized disclosure.
- Direct providers to submit supporting documentation electronically through the national standard “275” transaction or according to payer requirements.
Additional changes include new requirements for some bill adjustment notices (EOB) and amended requirements for provider overpayment refund. Procedures for prior authorization review are also being amended.
A public hearing is scheduled for August 27, 2026, with any written comments due before the end of that hearing. An additional stakeholder listening session on the rules has also been scheduled for August 4, 2026. MyMatrixx by Evernorth plans to attend these meetings and submit comments after completing a thorough review of the proposed amendments.
Connecticut pharmaceutical fee schedule reduced significantly
The updated 2026 version of the Connecticut Workers’ Compensation Commission (WCC) Practitioner Fee Schedule was released with an effective date of July 15, 2026. Notable pharmaceutical changes include significant reductions in the base fee schedule rates, which are Average Wholesale Price (AWP)-based plus a dispensing fee.
Brand medications:
New rate: AWP - 20% + a $5 dispensing fee
Previous rate: AWP + a $5 dispensing fee
Generic medications:
New rate: AWP - 80% + an $8 dispensing fee
Previous rate: AWP + an $8 dispensing fee
The updated fee schedule was released by the state’s vendor on July 16, 2026, to those who pre-ordered it, a day after the actual effective date. The public was not provided with advance notice of the specific fee schedule changes or an opportunity to review and comment prior to publication.
Tennessee updates drug formulary to align with ODG
The Tennessee Bureau of Workers’ Compensation (BWC) posted an updated formulary in late June, effective July 1, 2026. For workers’ comp. claims, Tennessee regulations require the BWC to post the latest version of the formulary onto its website and make it effective the first of the following month. The delay in the effective date means that the BWC version of the formulary does not always align with the actual ODG formulary and its latest updates.
On its website, the BWC’s June 2026 formulary worksheet lists the many new, updated, or removed entries since the previous October 2025 worksheet.
The BWC medical director and medical advisory committee review and provide advice on whether to adopt or delay the adoption of ODG drug formulary and treatment guideline updates for Tennessee workers’ comp purposes.
More information on ODG formulary updates can be viewed on the MyMatrixx PharmaWatch page. MyMatrixx maintains ODG-based formularies and updates them in accordance with changes and state adoption.
Vermont proposed fee schedule updates
The Vermont Department of Labor formally proposed updates to its medical fee schedule rule (Rule 40). The proposed updates for pharmaceuticals include:
- Increasing the dispensing fee from $3.15 to $5.00
- Reimbursing drugs for home intravenous infusion therapy at the lesser of the amount charged or the AWP (currently reimbursed at AWP – 10%)
Other proposed updates include a prohibition against balance billing, updating references to incorporate the CMS-1500 and UB-04 billing forms (currently listed as HCFA 1500 and HCFA 1450), and adoption of the National Correct Coding Initiative (NCCI) for procedure-to-procedure (PTP) code pair edits and medically unlikely edits (MUE) for determining proper billing and reimbursement for medical services. The medical fee schedule rate table is also being updated.
A public hearing will be held on August 3, 2026. Public comments are being accepted through August 14, 2026.