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

Policy Matters Brief - July 26, 2023

July 26, 2023 · Public Policy & Regulatory Affairs Team

New York adopts PBM regulation

The New York Department of Financial Services (DFS) continues to push forward with various rule-making efforts related to final regulation of PBMs and their operations. Recently DFS published two specific regulations, Insurance Regulations 221 and 222, for final adoption. Regulation 221 sets the effective date for adopted PBM regulations to January 1, 2024. Regulation 222 establishes various requirements for the regulation of PBM activities, contracts, and actions in the provision of pharmacy care to and on behalf of health plans. Language in the final regulation exempts “health plans” serving workers’ compensation and auto claimants from other requirements included in these regulations. The DFS in their wisdom recognized that the provision of pharmacy services by PBMs is already regulated by both the Workers’ Compensation Board and the Department of Insurance and saw fit to not impose dual sets of regulations on PBMs providing these services. Information on both regulations can be found here.

New Jersey workers’ comp physician evaluation/reporting legislation signed

New Jersey Senate No. 3309, a bill revising certain physician fees in workers’ compensation claims, was signed into law on July 20, 2023. The bill increases the maximum fee payable to evaluating physicians for written opinions regarding the need for medical treatment or for an estimation of permanent disability, from $600 to $1,000. The bill also adds language to the law stating that a psychologist, nurse practitioner, or licensed clinical social worker who provides psychological treatment may be paid a fee for a report or testimony concerning their course of treatment of an injured worker.

Michigan auto no-fault bill would amend UR provisions

Michigan House Bill 4884, would (if passed and signed into law) amend the state’s auto no-fault law with respect to utilization review (UR). The bill changes the term "medically accepted standards" to "generally accepted standards”, which is defined as, “standards or guidelines that are generally relied on by medical professionals or others rendering treatment to an injured person, including generally accepted practice guidelines, evidence-based practice guidelines, or any other guidelines developed by the federal government or national or professional medical academics, associations, boards, or societies.” However, the definition also states that “generally accepted standards” does not include “any set of standards or guidelines developed by private, for-profit corporations for commercial gain." This exclusion would prohibit the use of certain commercial treatment guidelines which may otherwise be commonly used in the industry.

The bill also adds a one-year statute of limitations on UR appeals and states that in response to an appeal, an insurer must provide the methodology used to determine the reimbursement made by the insurer to the Department of Insurance and Financial Services (DIFS) and the provider. The methodology must include any adjustment made to the amount payable to the provider under Medicare on a form approved by DIFS.

HB 4884 was introduced on June 28 and referred to the Michigan House of Representatives Committee on Insurance and Financial Services.

The Tennessee Bureau of Workers’ Compensation updates existing inpatient hospital fee schedule rules, medical payment regulations and fee schedule rules

Reimbursement for implantables is now limited to a maximum of the hospital’s cost plus 15%. The capped amount has changed from $1000 to the original manufacturer’s invoice amount, with the invoice copy now to be included in billing. Penalties for some violations of the inpatient fee schedule rules have changed and a minor change was made to the "Trauma Admission” definition. These changes may be viewed here.

Updates recently adopted to existing medical payment regulations include new definitions for rate tables, updated conversion factors, notifications for the use of medically unlikely edits (MUE), payment modifier codes, methodologies, and exceptions. One such update removes a statement related to timely request for reconsideration. These adopted rule changes can be found here.

Updated rules governing the medical fee schedule, including amendments to reimbursement calculations and guidelines, can be found here.

These updates are effective September 25, 2023

For more information on workers’ compensation and auto regulations and legislation we are tracking this year, view our Legislative and Regulatory Tracker (select “Workers’ Compensation” or “Auto” as the “Select a Category” drop-down menu).

75th Annual SAWCA Convention

The Southern Association of Workers’ Compensation Administrators (SAWCA) will be celebrating its diamond anniversary at its 75th Annual Convention July 31 – August 4, 2023, at the OMNI Resort in Amelia Island, Florida. Optum will be sponsoring the traditional Regulators Roundtable session at the event, featuring the collective expertise of SAWCA’s jurisdictional leaders discussing issues that impact regulators and industry alike. There will also be a Service Provider Roundtable focusing on issues and concerns specific to the various companies serving the industry. Adam Fowler, Public Policy and Regulatory Affairs Manager with Optum, will be participating in that panel.

SAWCA is an organization comprised of 22 state workers’ compensation agencies and several industry organizations, including Optum, that come together to share ideas, perspectives and common concerns to improve workers’ compensation for all. We previously spoke with SAWCA’s Executive Director, Gary Davis, on one of our “Policy Guys” podcast episodes, where he provided an overview of the importance of SAWCA to the workers’ compensation community and how it connects regulators and industry professionals. Click here to listen to that episode.

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