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Policy Matters Alert

Important legislative and regulatory updates

New York passes bill impacting work comp pharmacy services

June 27, 2024 · Public Policy & Regulatory Affairs Team

OAfter years of attempts, New York lawmakers finally passed legislation impacting the ability of employers and insurers to direct workers’ comp pharmacy care. The result of the Legislature’s work, Senate Bill 1974, will eventually be sent to the Governor for her action.

Current New York law allows an employer or insurer to contract with a PBM to create a PBN (Pharmacy Benefit Network). The PBM/PBN must be registered with the New York Workers’ Compensation Board and submit a list the pharmacies in their network as well as a list of payer clients who access the network. Once registration is complete, employers and insurers may direct their injured workers to a pharmacy in their network and reduce or deny any out-of-network pharmacy bills they receive.

The language of SB 1974 would severely restrict (if not prohibit) employers and insurers to direct an injured worker to utilize a network pharmacy under certain circumstances. The bill states:

“Notwithstanding other subdivisions, a claimant shall not be required to obtain prescribed medicines through a pharmacy with which the employer or carrier has a contract and may obtain prescribed medicines from a pharmacy of his or her choice when . . .”

The bill also outlines when injured workers are not required to utilize a network pharmacy and describes the circumstances that enable them to choose a non-network pharmacy. Additionally, when an injured worker selects a non-network pharmacy, the employer or insurer must pay the full fee schedule for the dispensed medications.

SB 1974 has not yet reached the Governor’s desk. Concerned about the bill’s potential impact on New York employers and insurers, the Optum Public Policy and Regulatory Affairs (PPRA) team, along with the American Association of Payers, Administrators and Networks (AAPAN), is working with various New York based organizations to craft a message and meet with the Governor’s staff to urge her to veto the legislation. We urge all clients with New York business to contact us on how they can help communicate with the Governor or to direct their own policy teams to advocate a veto of this legislation.

Please feel free to reach out to your account manager for more information or contact our PPRA team at optumwc.policymatters@optum.com.

Additional Optum resources:

For more information on these policy developments and others we have been tracking this year, be sure to visit our Legislative and Regulatory Tracker. Bills or regulations can be filtered by insurance line, topic, status and jurisdiction.

If you have questions on these or any other public policy developments, please contact our team at OptumWC.PolicyMatters@optum.com.

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