Statehouse Watch

myMatrixx Statehouse Watch

Welcome to the new myMatrixx Statehouse Watch. Here, we will be featuring current policy developments in workers’ compensation impacting pharmacy in states across the country. Since workers’ compensation is heavily regulated by the individual states, myMatrixx has been active in this process since we were first established. We will be sharing regular new policy updates and insights during the year with our interactive map and commentary on items of interest impacting the PBM Workers’ Compensation market. To the extent workers' compensation is within the scope of any of these state laws, changes could be required to plan design and/or management.

Explained — what is the difference between regulation and legislation?

Learning the difference between these two distinct government actions is essential to understanding the process and meaning of the complex world of insurance services and benefits. This knowledge can help leaders better provide insight and guidance to their companies and clients regarding changes in state law and regulations.

  • Legislation: Legislation begins with state elected officials, including representatives and senators, crafting new ideas into bills to take through the legislative process. Once a bill is introduced, it will be assigned to a relevant committee for discussion and testimony in support and opposition from interested parties. These committees are typically where amendments are adopted. Once it passes out of committee, the piece of legislation will move to the floor vote of the chamber, house or senate, and be passed to the second chamber for the same process. Most bills introduced don’t get the needed support and die during this process. If the bill survives it will go to the Governor’s desk for signature, veto or passage without signature.

    This process typically takes three to five months. The bill that is first introduced usually has many changes before it reaches the governor. Many bills are also short on detail, resulting in potential confusion on interpretation and how to implement the new law in the industry. If so, this detail can be spelled out in the regulatory process.
  • Regulation: After the legislative process is complete, the enacted law is sent to the relevant state agency for rule making. The agency commissioners are typically appointed by the governors. The agencies impacting workers’ compensation can be the Department of Insurance or Department of Labor. Regulations are designed to clarify legislation and help affected parties facilitate necessary changes to comply with the state law. This detail is outlined, proposed, comments are received and then finally adopted. In most states this process typically takes two to three months.

    The Division of Insurance is responsible for regulating the business of insurance within its respective state. They have the authority to write and enforce rules. This includes investigations into practices in the claims payment industry. They have a primary responsibility to protect the consumer from fraud.

    The role of the workers’ compensation regulator varies by each state, but they are primarily responsible for the administration of workers’ compensation claims, and provide administrative and judicial services to assist in resolving disputes that arise in connection with claims for workers’ compensation benefits. One area of focus for this agency in many states is adoption of drug formularies, which are lists of name brand and generic prescriptions that can be used to treat the claimant, or injured worker. This allows for high quality of medical care and promotes return to work in a timely fashion, all while reducing administrative burden and cost.

Policy Updates

New York Workers Compensation OnBoard Project

New York Workers Compensation Board announces a new business information system, OnBoard, to increase efficiency and transition to a paperless system. It is anticipated the limited first phase to include Prior Authorization process will roll out in the Spring of 2021. The final launch scheduled for 2023 will introduce the Board’s web-based claim’s platform to replace the legacy, paper based systems.

For more information see the states link OnBoard: Building A New Web-Based Claims System (ny.gov) This will include more information on upcoming webinars and included FAQs and Fact sheets.

PBM Licensure

In 2020, nine states introduced new legislation directly impacting PBM licensure. Five failed and four were enacted. Three of those enacted, Idaho, Mississippi and Virginia, are applicable to workers’ compensation. myMatrixx is currently reviewing for any necessary internal action and awaiting regulations from the states in order to comply with any new requirement.

Other states have pending regulations to adopt new rules for prior legislative actions. Currently under our review for compliance is the state of Kentucky and Missouri for licensure or registration requirements. These two state regulatory requirements are not applicable to the workers’ compensation market.

This year, the state of Delaware attempted to change their law regulating PBMs. That legislation failed in 2020, however, it is anticipated a similar bill will be introduced in 2021. Even if these bills fail, legislators may redraft the old bill text and move forward with it the following legislative cycle.

CA Fee Schedule Changes

In 2020 there have been states regulating fee schedule changes and California stands out as worth noting, even though California Assembly Bill 2294 failed to pass. Titled the Medical Provider Network Transparency Act of 2020, it addressed changes that included:

  • Adoption of a pharmacy fee schedule with not less than 120% of fees prescribed in Medicare and 100% of cost paid to physician plus $250
  • Fee Schedule adjusted to conform to Medicare and Medi-Cal payment
  • New reimbursement and billing formula for Compounded Drugs based on sum of allowable fee per ingredient, plus dispensing fee allowed by Medi-Cal. If physician-dispensed maximum not to exceed 300% of documented paid costs and not more than $20 above documented paid costs

Several insurers, as well as myMatrixx, submitted comments expressing concerns with the legislation. This bill did not get the legislative support it required to survive the process.

Controlled Substance Regulation

Unfortunately, the opioid crisis in this country continues to be a problem. Among other actions, states are busy adopting new regulations in an attempt to limit fraudulent activity from either the provider or patient. Since workers’ compensation claims frequently include pain medications, this type of regulation is one we closely monitor. Over the past few months, 10 states have been working on adoption of new rules regulating the handling of opioids and other controlled substances, further tightening the use and distribution for those prescriptions.

One method of control is to require electronic prescribing for these substances. Since June of 2020, the states of Colorado, Tennessee, Texas, Virginia and Wyoming have been drafting and adopting new regulations mandating e-prescribing for opioids and benzodiazepines. State-based exceptions include cancer treatment, palliative care, end-of-life care and provider economic hardship. Visit our interactive Map to view the details.

Watching: Marijuana-Related Legislation

Medical Marijuana and Workers Compensation in New Jersey is being discussed and legislated in NJ AB 1708. If passed as written, it will provide for payment by Workers Compensation insurers or employers for medical treatment using marijuana associated with a WC injury. The bill allows the employer or carrier to pay the employee directly for costs with the proper receipt from that employee if they are barred from paying the dispensary directly.

This bill allows the federal “Controlled Substance Act” (CSA) to prohibit the payment for this treatment. The CSA regulates the manufacture and distribution of controlled substances such as hallucinogens, narcotics, depressants and stimulants. Marijuana is currently listed along with heroin as a controlled substance, a Schedule I drug, meaning it has a high chance for abuse and no medical benefit. In a 2016 analysis conducted by the DEA, they state there is also evidence of pharmacological effect and a risk to public health.

For the first time in history, on December 4, 2020, The U.S. House of Representatives voted 228 to 164, to decriminalize marijuana. The states have been challenging this currently with 45 states adopting decriminalization and/or allowing medical marijuana as a treatment in 2020. The mention of the CSA may be a way to move forward quickly with insurer claim payment, if congress is successful in removing this drug from the schedule I, or if federal regulators continue to not enforce this section of the Act.

Disclaimer

The information which is provided herein and links to other related web sites are offered as a courtesy to our clients. All material is intended for informational purposes only and is not considered a recommendation or legal advice. myMatrixx accepts no liability for the consequences of any actions taken on the basis of the information provided.