Policy Matters Brief - August 17, 2022

August 17, 2022 · Public Policy & Regulatory Affairs Team

New York Workers’ Compensation Board proposes pharmacy network regulations
Recently, the New York Workers’ Compensation Board (WCB) published a notice of official rule-making along with proposed changes to the existing pharmacy network regulations. Specifically, the WCB intends to update Section 440.8 of the Pharmacy Network Regulations as it relates to notification of network participants and dispensing pharmacies.

At present, insurers and other payers with workers’ compensation claims in New York can utilize a pharmacy network to direct injured workers into using a pharmacy within that network. These networks must be established with the WCB and follow numerous regulatory requirements around notification and provision of pharmacy care.

The proposed language to Section 440.8, will require payers to provide written notification to a non-network pharmacy provider. The notification is required to be in the form/format which the payer accepts pharmacy bills for payment and also requires the payer to reimburse a non-network pharmacy or dispensing entity at the fee schedule until such notification is received. Information on the proposed rules can be found here, and all public comments on the proposed changes are due by August 29, 2022.

New York issues updates on several items related to the CMS-1500 project
In 2022, the New York Workers’ Compensation Board (WCB) rolled out the final phase of their electronic billing project – the CMS-1500 Project – for payers, providers and the WCB. On Monday, August 8, 2022, the WCB urged all providers and payers to pay attention to the required forms/formats to be used moving forward as outlined below:

As of July 1, 2022, the use of the CMS-1500 is mandatory for all medical services, as well as inclusion of any medical narrative(s).
As of September 19, 2022, it is mandatory to electronically provide the proper EOB and Claim Adjustment Reasons Codes (CARC) to the healthcare providers that identify the same (CARCs) as specified on the Form C-8.1B or Form C-8.4 when the associated medical bill was received electronically. More information on the specific updates for Form C-8.1B can be found here or Form C-8.4 can be found here.

More information about the CMS-1500 project can be found here.

California DWC clarifies application of MPN provider directory requirements
The California Division of Workers’ Compensation (DWC) issued a “newsline” to clarify the types of entities or companies that can be included in a medical provider network (MPN) provider directory.

Per the DWC, it will disapprove an MPN provider listing that includes non-compliant provider names including non-professional organizations, management services organizations, scheduling and coordinating companies, cost containment companies, or other non-provider entities.

The DWC states it will approve MPN submissions that contain the names of licensed providers, professional corporations that can legally render medical services under the corporate name, and the names of licensed health care facilities.

Colorado proposed workers’ comp medical fee schedule rule changes impacting pharmacy
The Colorado Division of Workers’ Compensation has proposed annual updates to its medical fee schedule rule (rule 18). Of particular note in the proposed changes are the following for pharmacy:

A provision to require prior authorization for "any medication for which a significantly lower-cost therapeutic equivalent is available, including commercially or over-the-counter (OTC), even in a different strength/dosage"
Increases to reimbursement rates for prescription strength compounded medications and OTC topical medications
Simplification of OTC topical cap language to apply to all such "agents" rather than specifically only "muscle relaxant, analgesic, anti- inflammatory, and/or antineuritic medications"

The proposed prior authorization language above defines “significantly lower cost” as a therapeutic equivalent medication that costs at least $50 less for the same number of days’ supply. This language is primarily meant to address the physician dispensed medications that seem to be dispensed in unique dosages or strengths using distinct NDCs with higher average wholesale price (AWP) values in order to substantially increase reimbursement. (e.g., forms of diclofenac gel and lidocaine-menthol patches)

The DWC has scheduled a virtual public hearing on the proposed changes for September 1, 2022, with any written comments also due that day.

Alaska expands firefighter workers’ comp coverage presumption law to include breast cancer
Alaska Senate Bill 131 has been signed into law. The bill expands an existing firefighter workers’ compensation coverage presumption law to include breast cancer. Existing law already included respiratory disease; cardiovascular events experienced within 72 hours after exposure to smoke, fumes, or toxic substances; and several other types of cancers in the list of firefighter diseases presumed compensable. The bill also amends the definition of “firefighter” (includes those associated with state, municipal and volunteer fire departments).

The amended law takes effect January 1, 2023. It also, separately, increases the maximum funeral expenses and survivor benefits in a workers’ comp claim (not just for firefighters).

For more information on this and other legislation or regulations we are tracking related to presumptions, view our Legislative and Regulatory Tracker (select “Presumptions” as the Topic in the dropdown menu).

Oregon WCD seeking advice for medical rules
Per its yearly tradition, the Oregon Workers' Compensation Division will schedule a rulemaking advisory committee meeting regarding three of its main medical rules:

OAR 436-009, “Oregon Medical Fee and Payment Rules”
OAR 436-010, “Medical Services”
OAR 436-015, “Managed Care Organizations”

The Division’s preliminary list of topics includes the typical annual issues to account for up-to-date billing codes, relative value units and fee schedules. The list also includes the following “one time” issues:

Update Form 4909 (Pharmaceutical Clinical Justification for Workers' Compensation): The list of most costly drugs may have changed since introduction of the form in 2014
Arbiter fees: WCD is seeing a shrinking pool of providers willing to perform arbiter exams
New Place of Service (POS) code for telehealth services: CMS assigned POS Code "10" to telehealth services where the patient is at home
Provider-employer communication

The Division is also asking for stakeholders to contribute agenda topics using this form by September 1, 2022, if possible. Those interested in attending the rulemaking advisory committee meeting in November or December (day/time to be determined) can reply to WCD.Policy@dcbs.oregon.gov. Any questions can be directed to Fred Bruyns, policy analyst/rules coordinator at 971-286-0316.

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