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Policy Matters Brief April 5 2021

April 5, 2021 · Policy Matters team

Kentucky DWC revises proposed changes to pharmacy fee schedule

In response to a variety of public comments received from several stakeholders, including Optum, the Kentucky Department of Workers’ Claims (DWC) revised their originally proposed pharmacy fee schedule regulation changes.

In the latest revisions, reimbursement is proposed to be AWP-10% for brand and AWP-15% for generic. The current fee schedule is 100% of the “wholesale price,” as defined in the existing regulation. As noted in a prior Policy Matters Brief, one of the originally proposed changes, which was maintained after these revisions, would more objectively define “average wholesale price” (AWP) and tie it to specific publication sources.

Other proposed DWC revisions in response to stakeholder comments include:

  • De-linking the contract rate from “lesser of” reimbursement calculation as originally proposed to prevent tacking on the $5 dispensing fee in addition to any contract rate (contracting is still permitted for rates lower than fee schedule)
  • Removing conflicting proposed language concerning generic substitution and the originally[FJ1]  proposed statement of medical necessity provision (generic substitution will still be required unless there is no generic equivalent or the prescriber indicates on prescription that substitution is prohibited)
  • Adding a definition for “usual and customary” (the charge a provider would apply to an otherwise uninsured patient)
  • Adding modified/simplified definitions for “brand drug” and “generic drug”
  • Adding a $20 compounding fee

This is not the final step in rulemaking. The revised proposed regulation now has to go through a legislative committee review process, and the eventual effective date will depend on the timing of that process. The latest version of the proposed rule can be viewed here.

New Jersey approves recreational marijuana

Based upon voter approval of an initiative on the statewide 2020 November ballot, New Jersey recently became the 13th state to approve recreational marijuana use. In early 2021, the Legislature and Governor approved AB 21 permitting recreational marijuana. While segments of the bill take effect immediately, there is an expected 18-month timeframe for the Cannabis Regulatory Commission to adopt necessary regulations and licenses of dispensaries. 

The bill bans smoking and vaping in workplaces and permits employer testing after a workplace accident if the employer suspects that intoxication played a role. 

New York approves recreational marijuana

Lawmakers have approved and the Governor has signed a measure that will expand the state’s medical marijuana program and initiate regulatory steps to permit recreational marijuana. The law requires the state to set up licensure and tax regulations and address other necessary structural issues to allow selling recreational marijuana to begin.

It allows sale of recreational marijuana to adults over age 21 and also sets up a possible licensing provision for delivery of cannabis products to customers. While the legislation takes effect immediately, it is expected the regulatory process could take 18 to 24 months before sales start. 

The provision also includes funding for campaigns aimed at reducing the risk of cannabis among school-aged children and to launch a study that examines the extent that cannabis impairs driving.

Opt out provision for local municipalities

It allows cities, towns and villages to opt out of allowing adult-use cannabis retail dispensaries or on-site consumption licenses pursuant to municipality-adopted laws. The provisions of the legislation (Senate Bill 854A) can be found here.

Ohio workers’ comp pharmacy rules revised

The Ohio Bureau of Workers’ Compensation (BWC) adopted revisions to many of their medical rules; all become effective April 1, 2021.The revisions include several pharmacy changes, notably:

  • Amended compound reimbursement language – including applying ingredient-level reimbursement calculations to all compounds, not just to non-sterile compounds as in current rules, and applying the existing $400 cap for any singular compound to only any singular non-sterile compound
  •  A prescribed timeframe of three business days for self-insuring employers to approve or deny a pharmacy prior authorization request
  • Amended refill-to-soon thresholds.

A copy of changes to the self-insuring employer pharmacy rule can be viewed here. Similar changes were also made for BWC/state fund claims.

Utah amends opioid prescription limit to remove surgery exception, adds prescriber requirements

Recently signed Utah House Bill 15 removes a surgery exception to the state’s existing seven-day limit on certain opioid prescriptions. It also will require prescribers to take additional steps when issuing a “high-risk prescription.”

Existing Utah law established that a prescription for a Schedule II or Schedule III controlled substance that is an opiate and prescribed for an acute condition shall be completely or partially filled in a quantity not to exceed a seven-day supply. But it included an exception for a prescription issued for a surgery when the practitioner determined a quantity exceeding seven days was needed. That surgery exception allowed the practitioner to prescribe up to a 30-day supply, with a partial fill at their discretion. HB 15 now removes that surgery prescription exception.

High-risk prescriptions

In addition, the bill adds that a practitioner who prescribes a “high-risk prescription” (a prescription for an opiate or a benzodiazepine written to continue for longer than 30 consecutive days) shall, before issuing it, verify in the state’s prescription drug monitoring program (PDMP) that the patient does not have a currently active high-risk prescription from a different practitioner. If the PDMP shows the patient has received a currently active, high-risk prescription from a different practitioner, the practitioner may not issue the prescription unless they contact and consult with each practitioner who issued such prescription. The practitioner will then need to document in the patient's medical record they made such contact and reason why the patient needs multiple high-risk prescriptions from different practitioners.

Noteworthy points

It is important to note that this change in law governs the actual prescribing of these drugs and actions to be taken by prescribers. Additionally, existing law states that a pharmacist is not required to verify that a prescription is in compliance with the opioid supply limitation. This area of law does not govern liability for payment. As such, issues concerning insurer authorization, coverage and reimbursement are not addressed.


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