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 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.
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.
Date: May 24, 2021
The Chair has delayed the implementation of amendments to the following regulations, which were scheduled to become effective on June 7, 2021:...
- Official New York Workers' Compensation Durable Medical Equipment (DME) Fee Schedule
- Prior Authorization Requests
- New York Workers' Compensation Drug Formulary
New effective dates for the amended regulations will coincide with the launch of OnBoard: Limited Release, the first phase of the Workers' Compensation Board's new business information system, which is planned for summer 2021. More information will be shared in the coming weeks.
Please submit comments by emailing email@example.com.
The US House of Representatives passed the Secure and Fair Enforcement Act April 19, 2021. It was also introduced in the US Senate under S910 on March 23, 2021. If this bill were enacted, it would not legalize cannabis. What it would do is prohibit a federal banking regulator from penalizing a depository institution for providing “banking services” to a cannabis related business in states that allow it.
Will it pass? It is hard to predict; however, it is growing in favor. The Senate version has not been scheduled for hearing yet, but is assigned to the Committee on Banking, Housing and Urban Affairs. It is important to note it has 38 co-sponsors. It now has bipartisan support with 8 republicans signing on as co-sponsors. Could 2021 be the year?
This bill will allow for a provider to enter a managed care agreement with a network. It will also keep in place the provision for the self-funded market to direct care through a pharmacy network. This will keep safety measures in place for the injured worker as well as control the rising cost of prescription drugs within workers' compensation.
If you have workers' compensation business in New York and determine this bill may be problematic, you should contact the House bill sponsor, Assembly Member Harry Bronson, Phone:518/455-4527. Since it does have unintended consequences, he should be made aware of your concerns.
For the latest updates on the New York Workers’ Compensation OnBoard modernization, please click on the link below.
States recognize physician dispensed drugs as a way to ensure that patients pick up prescriptions or can get medication, such as when there is a lack of pharmacy access in rural areas. However, there are also physicians who take advantage of repackaging to inflate the price of the drugs dispensed. To combat these practices, states have or may pass regulations controlling physician dispensing.
Generally, regulations restricting physician dispensing fall under three categories:
- States require repackaged medication to be billed under the original manufacturers National Drug Code (NDC). This prevents repackaged drugs from being billed at a new inflated NDC.
- States prohibit doctors from collecting the dispensing fee, which is generally allowed by the state fee schedule for drugs dispensed at pharmacies.
- States may prohibit physicians from dispensing medications from their office unless it is an emergency, or the patient lives in a rural area where it is not practical to have the medication dispensed from a pharmacy.
While there are legitimate reasons for physician dispensing, it is important for insurers to educate their injured workers about filling prescriptions through pharmacies so they can be consulted by a pharmacist and to avoid potentially dangerous drug interactions. Employers and insurers want an injured worker to have the appropriate treatments necessary for recovery. In workers’ compensation, overutilization and lack of justification of medical necessity are areas of concern potentially impacting the workers’ health as well as adding an inflated cost to that care.
According to the WCB, insurers, self-insured employers and third-party administrators must notify health care providers and claimants of the new effective date on or before April 1, 2021. On or after June 7, 2021, all refills or renewals of prescriptions must use a drug formulary medication unless prior authorization has been obtained before the date of the refill or renewal.
A refill means any subsequent fill of a prescription when the number of refills is explicitly included in the original prescription. A renewal means a prescription that the injured worker has been taking, but which there are no available refills.
In workers’ compensation, the ability for a carrier to establish provider networks not only helps keep medical expenses in check, they also provide for safety measures for injured workers. Some states have prohibitions on these programs. Currently, more states have introduced legislation that, if enacted, will limit or stop direction of care programs from going forward. During the states’ 2021 legislative cycle, the states of Arizona, California, Kansas, Montana, New York, New Jersey, Oklahoma and West Virginia have introduced new bills attacking provider networks. These bills range from onerous operational requirements, higher prescription reimbursement, reporting regulations for Medical Provider Networks, direct prohibition of a managed care network and higher reimbursement protections for out-of-state mail order pharmacies.
The viability of all of these changes is unclear. myMatrixx is actively advocating with those state legislators and regulators in support of direction of care. If you seek more detail regarding these bills, use our interactive map and download a report on the topic by selecting “Direction of Care.”
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.
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.
- 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.
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.
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.
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.