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The latest legislative and regulatory activity that impacts you and the services we provide

Policy Matters Brief - December 7, 2022

December 7, 2022 · Public Policy & Regulatory Affairs Team

Kentucky governor issues executive order to decriminalize medical marijuana possession under certain conditions

Kentucky Governor Andy Beshear recently issued an executive order attempting to decriminalize possession of medical marijuana in the state for certain conditions. The executive order, which goes into effect January 1, 2023, specifically grants a “full, complete and conditional pardon” to any person who, after the effective date of the order, is accused of possession of marijuana if certain conditions are met. Under current law, such possession is a Class B misdemeanor.

The executive order specifies that the medical cannabis has to have been lawfully purchased in a jurisdiction within the U.S. but outside of Kentucky and the individual or their caregiver shall produce a written certification by a healthcare provider who is licensed to practice medicine in Kentucky or in the jurisdiction of the individual 's residence, and is in good standing with the appropriate licensure board, that shows that the individual has been diagnosed with at least one of 21 specifically listed medical conditions. That list includes the following conditions more notable in the workers’ compensation setting: severe and chronic pain, intractable pain, and PTSD.

In a press release, the governor’s office characterized the executive order as an effort to reduce Kentuckians’ reliance on addictive opioids and to provide them relief from pain. Beshear also noted that he will work with lawmakers this upcoming session to push for full legalization of medical cannabis.

It is worth noting that previously in 2022, legislation to legalize medical marijuana in the state failed to pass. That legislation expressly stated that nothing in the law would require a workers' compensation carrier or self-funded employer providing workers' compensation benefits to reimburse a person for costs associated with the use of medicinal cannabis.

It should also be noted that the Kentucky Department of Workers’ Claims has adopted ODG as its official medical treatment guidelines for workers’ compensation claims. ODG lists cannabinoids as not recommended for pain.

For more information on legislation or proposed regulations related to medical marijuana we have been tracking across the country, including in Kentucky, view our Legislative and Regulatory Tracker and select “Marijuana, Cannabis, CBD” as the topic. Our 2021 resource document on state-by-state medical marijuana rules and workers’ compensation may also be a good quick reference.


Proposed updates to HIPAA pharmacy billing standards

The U.S. Department of Health and Human Services (HHS) recently issued a proposed rule to update various pharmacy electronic transaction standards adopted for use between providers and payers. Most notably for the billing of dispensed medications, the proposed rule would update the currently-adopted National Council for Prescription Drug Programs (NCPDP) Version D.0 Telecommunications Standard to Version F6. Version F6 contains several enhancements and updates, including improvements to the information attached to controlled substance transactions and more specific fields to differentiate various types of fees, among other changes (some specific to workers’ compensation). HHS is proposing a two-year compliance date following the effective date of the final rule. The public comment period runs until January 9, 2023.

The Health Insurance Portability and Accountability Act of 1996 (HIPAA) required HHS to adopt standards for electronic health care administrative transactions conducted between health care providers, health plans, and health care clearinghouses. While workers’ compensation and auto no-fault are generally not covered under HIPAA, the HIPAA-adopted standards are considered national standards in practice. Most pharmacies and pharmacy benefit managers (PBMs) use the HIPAA-adopted NCPDP electronic billing standards when processing workers’ compensation and auto no-fault transactions for dispensed medications. In addition, several state workers’ compensation laws require use of the HIPAA-adopted standards for electronic billing of workers’ compensation medical or pharmacy transactions – many based on the model rule developed by the International Association of Industrial Accident Boards and Commissions (IAIABC).

We previously spoke with IAIABC leadership in our “Policy Guys” podcast, providing an overview of the importance of IAIABC to the workers’ comp. community, including the development and adoption of national standards. Click here to listen to that episode.

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