Montana and New York delay workers’ comp drug formularies for legacy claims and prescriptions due to COVID-19

• Montana requests insurers delay formulary implementation for legacy claims until COVID-19 crisis passes.
• New York modifies formulary to extend implementation date for legacy scripts until January 1, 2021.
• Optum Workers’ Comp and Auto No-fault will adjust processes to account for both delays.

Montana urges claims administrators to delay application of workers’ comp drug formulary for legacy claims
The Montana Department of Labor & Industry, Employment Relations Division, distributed a letter on March 30, 2020 to all certified claims examiners in the state requesting they wait until the COVID-19 epidemic passes before requiring drug formulary compliance for “legacy claims.” Specifically, the notice states: “Given the immediate crisis of COVID-19 and the overload to our healthcare system, the Department is formally requesting all TPAs and insurers to delay adherence to Drug Formulary requirements for Legacy Claims until the COVID-19 crisis passes.”

As a reminder, existing regulations state that for claims arising before April 1, 2019 (“legacy” claims), the formulary was to apply to prescriptions written on or after April 1, 2020, or 90 days after the insurer gives written notice to the injured person and treating physician, compliant with the regulations – whichever comes last. The state is now requesting that all payers delay formulary application for legacy claims to ensure providers will not have an added layer of complexity in providing care to injured persons during the COVID-19 care.

New York delays workers’ comp drug formulary application for legacy prescriptions
On April 8, 2020, the New York Workers’ Compensation Board (WCB) issued a statement regarding application of drug formulary requirements to ongoing refills/renewals of non-formulary drugs, which were initiated prior to the December 5, 2019 formulary implementation date. The WCB announced they will extend the initial June 5, 2020 effective date to January 1, 2021 for application of formulary requirements to these refills/renewals of non-formulary drugs, initiated prior to December 5, 2019. This delay does not apply to any newly initiated therapies, as these therapies are subject to drug formulary requirements per the original December 5, 2019 implementation.

Specifically, the WCB noted the following: “In response to the challenges of COVID-19, the WCB Chair has modified the New York workers’ compensation formulary (12 NYCRR 441.3(a)(2)) to extend the deadline by which all health care providers must obtain prior authorization for renewals of non-formulary medications from June 5, 2020 to January 1, 2021.” The WCB believes this extension will reduce the impact that COVID-19 may have on health care providers ability to implement the requirement and provide more time to providers to ensure that prescription renewals are consistent with the formulary. More information on the NY WCB responses to COVID-19 can be found, here.

Optum to adjust processes
Optum will adhere to the request and delay implementation of the Montana workers’ compensation formulary for legacy claims at this time, pending further developments with COVID-19 or guidance from the state.

We will also adjust all processes and procedures to ensure application of the New York workers’ compensation formulary requirements for those identified claims to comply with their new January 1, 2021 date. Additionally, our clinical team will continue to monitor modifications of the New York Drug List to ensure the extended time frame is properly applied to ongoing therapies if there is a drug status change before January 1, 2021.

Optum urges our clients to review their current processes and procedures to comply with these delays and potentially take the opportunity to further discuss this delay with their injured persons and their treating physicians. Our Public Policy & Regulatory Affairs team, along with our clinical team, will be closely monitoring these states and provide further updates as warranted.

To keep up on changes to workers’ compensation policies related to the delivery of healthcare during the COVID-19 crisis, please see our special state-by-state workers’ compensation research report, here.

Should you have any questions on this or any other developing public policy matter, please reach out to our team at OWCAPolicyMatters@optum.com.