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Policy Matters Brief September 23, 2021

September 23, 2021 · Public Policy & Regulatory Affairs Team

New York updates
Medical Marijuana – A New York appellate court recently ruled that an injured worker was entitled to a variance from the Medical Treatment Guidelines (MTGs) for the use of medical marijuana for his chronic pain. In 2019, the plaintiff’s treating physician wrote a letter attesting to the need to treat his chronic pain with medical marijuana and also filed a variance request with the Workers’ Compensation Board (WCB) to comply with the requirements of the MTGs.

The employer denied the variance and a workers’ compensation judge subsequently upheld the denial, but the WCB modified the judge’s decision and granted the variance. Upon review of the medical information, including medication therapies and other invasive treatments that failed to reduce the plaintiff’s chronic pain as compared to the effective treatment with medical marijuana therapy, the appellate court ruled that the Public Health Law authorizes the use of medical marijuana to treat chronic pain under workers’ compensation if the MTG variance is properly granted. The court agreed with the WCB’s modification of the original denials. 

Drug Formulary – In a recent rule adoption, the New York Workers’ Compensation Board (WCB) published a final, and modified, version of the latest drug formulary rules that took effect September 1, 2021. The finalized and adopted rule(s) make several changes to the existing drug formulary processes for use of:

  • An updated drug formulary list
  • Application of the formulary to “legacy” claims, and
  • Processes for seeking prior approval for the use of medical marijuana  

It is important to recognize key dates contained within the rule and a post-rule notice publication by the WCB. Implementation dates have been delayed within the adopted rule.
In the adopted final rule, the WCB stated:

  • Stakeholders shall use the updated drug formulary list that was effective April 1, 2021
  • Prior authorization and variances for the use of medical marijuana will no longer be submitted via the paper process but will be submitted via the OnBoard – Limited Release system as a medication PAR
  • Drug formulary requirements shall apply to the “legacy” claims or claims still receiving “refills and renewals” as of September 13, 2021

However, the WCB subsequently released a Board Announcement stating that all changes adopted in the September 1, 2021 rule – as published in the State Register – will be deferred from the September 1, 2021 effective date until they can coincide with the formal launch of the OnBoard-Limited Release system.

The WCB also advised they will provide all stakeholders with a minimum of four weeks advance notice of the roll-out of OnBoard-Limited Release so stakeholders can take proper and timely action to prepare for full formulary application. 

Texas updates on experimental or investigational medical services
The Texas Department of Insurance recently issued a bulletin on utilization review (UR) determinations for experimental or investigational medical services.

In the bulletin #B-0025-21, the Commissioner’s office stated that adverse determinations and workers’ compensation utilization review services based on experimental or investigational health care services are subject to existing UR requirements in state law.  Workers’ compensation carriers, health plan insurers and utilization review agents should review the existing laws to ensure compliance with those requirements. 

Impacted entities should ensure:

  • Use of the appropriate personnel, screening criteria and procedures in handling these types of reviews 
  • Issuance of adverse determination notices are provided in the required time period and include all information as required by the existing laws or regulations

Arizona publishes new fee schedules
The Arizona Industrial Commission (IC) has published its 2021-2022 Medical and Pharmacy Fee Schedules (FS). Effective October 1, 2021, modifications from the prior version include:

  • Changing to the Current Procedural Terminology (CPT) and Healthcare Common Procedure Coding System (HCPCS) codes, as well as updated Resource-Based Relative Value Scale (RBRVS) conversion factors for some medical services such as anesthesia, surgery and radiology; plus,
  • Adopting pharmacy language that places a reimbursement cap of $30 for a 30-day supply for topical creams or lotions and $75 for a 30-day supply of topical patches. 

All impacted stakeholders should review the new FS documents as each has separate guidelines, codes and conversion factors.

The new fee schedule(s) govern the billing, provision and reimbursement of medical and pharmacy care to all injured workers in the state. Changes to the 2020-2021 fee schedule were discussed by the IC and stakeholders during the rule-making process. Some of the proposed changes were eventually adopted into the new fee schedule while others were tabled for continued discussion in the coming year. 

Kentucky workers’ comp pharmacy fee schedule amended
After a mandatory review period and no further legislative committee action, proposed amendments to the Kentucky workers’ compensation pharmacy fee schedule regulation became effective August 31, 2021.
New medication reimbursement rates:

  • Generic – 85% of average wholesale price (AWP), and
  • Brand name – 90% of AWP

Rates were previously set at 100% of the “wholesale price.”  
“Wholesale price” as previously defined under the regulation led to some disputes; as a result,  specific AWP publication sources were adopted in the amended regulation to provide a more objective standard. Medi-Span is now to be used for AWP. However, if the medication is not included in Medi-Span, then, Red Book is to be used.

The amended regulation also modified language related to generic substitution, repackaged and compound medication billing and reimbursement (previously only addressed in the physician fee schedule). Included in these amendments, a single compounding fee of $20 is now to be reimbursed for a compound medication.

Contracting also continues to be permitted. The amended regulation provides that insurers, self-insured employers or Pharmacy Benefit Managers may enter into agreements with pharmacies or other providers at rates lower than those listed in the regulation.

Washington workers’ comp formulary updated
The Washington Department of Labor and Industries (L&I) published changes to their state fund outpatient drug formulary to be effective October 1, 2021. The updates include adding several inhibitor drug classes.

The state fund’s outpatient drug formulary is a list of therapeutic classes and drugs that are covered by L&I. Drugs or therapeutic classes listed on the formulary do not guarantee coverage and may be subject to specific L&I policy and determination of appropriateness for the accepted conditions.

Washington is a monopolistic state but also permits employers to self-insure their workers’ comp claims. Self-insured employers are generally required to authorize treatment in accordance with L&I rules.

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