Policy Matters Brief November 23, 2020

Kentucky proposes changes to workers’ comp pharmacy fee schedule
The Kentucky Department of Workers’ Claims has scheduled a public hearing on January 21, 2021, to discuss proposed changes to their pharmacy fee schedule.

Notable proposed changes:

• Reduction in both brand and generic medication reimbursement rates
• Adoption of average wholesale price (AWP) publications for the first time
• Acknowledgement of the role of PBMs in contracting

Minor revisions are also proposed for repackaged and compounded medication provisions, as well as modifications to generic medication mandate language.

Fee schedule rates are proposed to be reduced to 85% of AWP for brand medications and 60% of AWP for generic medications, with a $5 dispensing fee. The primary AWP publication source is proposed to be Medi-Span, with REDBOOK used in cases where a medication is not included in Medi-Span.

Revised language also acknowledges ability of a payer to agree to lower reimbursement rates under contract with a PBM or other pharmacy service provider.

Written comments are due January 31, 2021. The full regulatory text, public hearing information and details on how to submit comments can be viewed online here.

Montana proposes update to workers’ comp formulary source reference
The Montana Department of Labor and Industry has scheduled a public hearing for November 30, 2020, on a proposed update to their drug formulary. This proposal keeps their adopted formulary reference (ODG) current since the enabling legislation requires a formal annual adoption of the publication source. The existing regulation, however, provides that monthly ODG updates are automatically adopted by reference, ensuring the most current ODG formulary is utilized in practice.  

More information on the hearing and proposed update can be viewed online, here.

Montana’s workers’ comp formulary originally went into effect for new dates of injury on or after April 1, 2019, and was scheduled to go into effect for “legacy” claims (older dates of injury), where communication requirements have been met, April 1, 2020. However, in late March of 2020, the Department published a formal “request” to insurers and third-party administrators that they “delay adherence to the Drug Formulary requirements for Legacy Claims until the COVID-19 crisis passes” to ensure that providers would not have “this added layer of healthcare delivery complexity during a time when they have no additional capacity.” The Department has yet to update or amend that delay request.

New York Debuts OnBoard
As the New York Workers’ Compensation Board moves to modernize claims access, they recently offered a glimpse of the new OnBoard claims system, version 1.0. A limited release is expected to roll-out in Spring of 2021. 

As part of the limited release, the system will include enhancements for prior authorization of medical services and durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) by replacing the existing paper processes and specific paper forms with a real-time web-based prior authorization process. The limited release will allow medical providers to submit these requests, often called PARs, via OnBoard. 

OnBoard will permit filing of PARs including MG-1, the C-4, the MG-2 and eventually DMEPOS as necessitated. Eventually, the WCB hopes to integrate existing drug formulary PAR requests and processes into OnBoard by transitioning them from the existing portal while not making any changes to the processes.

As the WCB continues to roll-out OnBoard, system stakeholders should continue to monitor the WCB OnBoard page for future communications and webinars.

The new portal is expected to integrate claims and medical information over the coming years, with full implementation no later than summer 2023. 

New York proposes changes to DMEPOS fee schedule
The New York Workers’ Compensation Board (WCB) recently proposed changes to the existing durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) fee schedule that impact coding and reimbursement structures as well as impart enhanced requirements for prior authorization (PAR) of DMEPOS items. 

The proposed DMEPOS fee schedule looks very similar to the medications list for the drug formulary and will no longer be tied directly to the state Medicaid fee schedule. The proposed fee schedule provides HCPCS codes, a description of and reimbursement rate for each DMEPOS item as well as an indicator if the item requires prior authorization. Prior authorization will be required for all items indicated by the fee schedule list or when an item or HCPCS code does not appear on the list. The proposed rule also modifies reimbursement for rental items and rental time frames.  

The WCB intends to roll-out the proposed DMEPOS fee schedule in conjunction with implementation of the OnBoard system. In fact, in the early limited release of OnBoard, it is anticipated that all PAR requests for DMEPOS items will take place via OnBoard. The original notification of the proposed rule, and the new fee schedule listing, can be found here. The rule was published on October 21, 2020, and the comment period remains open for 60 days from publication.