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

Policy Matters Brief - January 17, 2024

January 17, 2024 · Public Policy & Regulatory Affairs Team

States update fee schedules

With the new year comes the need for many states to update their medical treatment rules and fee schedules. At this time, several states are required by either regulation or statute to review and update their medical, ancillary and pharmacy services fee schedules. Some states issue updates because their reimbursement rates are tied to Medicare, while other states implement needed adjustments to coding and reimbursement at the beginning of each year.

Fee schedule updates often reflect changes in the cost of providing care through reimbursement and ensures the updating of billing and reimbursement codes such as CPT and HCPCS. Although these changes are often minimal in size and scope, the Optum PPRA team monitors these developments to make sure that they are fully implemented into our systems in order to drive compliance.

In addition to others discussed in more detail later in this update, the following states adopted annual fee schedule updates effective January 1, 2024:

Alaska
Illinois
Maine
Massachusetts – Hospital Only
Nebraska
Ohio
Pennsylvania
Oregon
Rhode Island
Utah – Auto and Work Comp.
Washington

California Schedules P&T Committee Meeting

The California Division of Workers’ Compensation (DWC) published notice of a January meeting of the Division’s Pharmacy and Therapeutic Committee (P&T). As established by California Labor Code section 5307.29, the P&T Committee is an advisory body required to consult with the Division regarding the Medical Treatment Utilization Schedule (MTUS) Drug Formulary. A public video conference is scheduled for January 17, 2024, from 12:30 to 2:30 Pacific Standard Time. More information on the meeting and the agenda can be found here.

Proposed update to California workers’ comp opioid treatment guidelines

The California Division of Workers’ Compensation (DWC) proposed updates to the MTUS. These revised medical treatment guidelines incorporate the latest published recommendations from the American College of Occupational and Environmental Medicine (ACOEM) for opioids (from December 12, 2023).

Although California workers’ compensation law provides that the MTUS treatment guidelines are presumptively correct regarding the extent and scope of medical treatment, this presumption can be rebutted and may be controverted by a preponderance of medical evidence establishing that a variance from the guidelines is reasonably required to cure or relieve the injured worker from the effects of their industrial injury.

The DWC is required to have a 30-day public comment period, hold a public hearing, and respond to all comments received prior to publishing the order adopting the updates online. Written comments are due January 26, 2024,and a virtual hearing is scheduled for that same date.

Workers’ comp mental injury/illness bills filed in several states

A bill introduced in Oklahoma would exempt certain first responders from a workers’ compensation law requirement stating that a mental injury or illness is not compensable unless caused by a physical injury. Currently, an exemption to this requirement only applies to a victim of a violent crime. Senate Bill 1457, specifically applies this added exemption to a law enforcement officer, paid or volunteer firefighter, or emergency medical technician employed on a full-time basis by a municipality, county, or the state, or to a voluntary firefighter who suffers post-traumatic stress disorder (PTSD) while responding to an emergency. Also, if the Oklahoma Workers' Compensation Commission (WCC) determines that a first responder has suffered PTSD not accompanied by a physical injury, the employer shall provide reasonable and necessary medical treatment, subject to the WCC fee schedule, for a period not longer than one year, and the employer is not responsible for prescription medicine costs in excess of $10,000. SB 1467 is scheduled for first reading in the Senate in February of this year.

Meanwhile in Virginia, House Bill 68, pre-filed in late December, would allow emergency dispatchers to claim workers' compensation benefits relating to PTSD, anxiety disorder, or depressive disorder similar to law enforcement officers and firefighters under existing law. Under current law, those disorders are compensable if certain conditions are met, including a requirement that undergoing a “qualifying event” was a substantial factor in causing the disorder. “Qualifying event” is defined as an event resulting in serious bodily injury or death to any person or persons; involving a minor who has been injured, killed, abused, or exploited; involving an immediate threat to life of the claimant or another individual; involving mass casualties; or responding to crime scenes for investigation. The existing provisions related to anxiety and depressive orders were added to the law as a result of legislation from last year. A similar bill attempted last year to add this coverage for dispatchers passed the Senate but failed to passed the House.

And in Alaska, House Bill 239, pre-filed on January 8, 2024, would create a presumption that PTSD is compensable under workers’ comp for firefighters, peace officers, correctional officers, emergency medical technicians, dispatchers, mobile intensive care paramedics, and employees certified under state law to perform emergency medical services. This presumption would apply to PTSD diagnosed during employment or within three years after the last date of employment.

Minnesota seeks input on workers’ comp PTSD study

The Minnesota Department of Labor and Industry (DLI) announced it has partnered with the Midwest Center for Occupational Health and Safety at the University of Minnesota to conduct a study which will identify systemic or regulatory changes to improve the experience and outcomes of employees with work-related PTSD. This agreement stems from legislation signed in 2023 requiring the DLI to conduct such a comprehensive study.The DLI is seeking input from interested parties and has asked stakeholders to complete this Workers' Compensation PTSD Policy form. More information about the study can be viewed online here.

Dr. Robert Hall, our Corporate Medical Director, previously joined our Policy Guys podcast to tackle the tough subject of PTSD. To listen to that episode, click here

New Jersey bill seeks to shorten workers’ comp medical dispute timeframe; another would increase PIP coverage requirements

An additional bill in New Jersey seeking to reduce the period during which disputes over workers’ compensation medical fees may be contested was introduced in December and referred to the Assembly Labor Committee. Assembly No. 5812 proposes to reduce the statute of limitations for a medical fee dispute to two years from the date that a payment or notice of denial of payment was received by a claimant. The current statute of limitations, as interpreted by state courts, is six years. A similar bill, Senate No. 3905, was introduced in June of last year and referred to the Senate Labor Committee but has seen no official movement since then.

Also in New Jersey, another bill (Assembly No. 5897), would increase the personal injury protection (PIP) coverage requirement for basic automobile insurance policies to $50,000 and require $50,000 minimum PIP coverage for standard automobile liability insurance policies. Current law requires basic automobile insurance policies to provide PIP coverage in an amount not to exceed $15,000 per person per accident, with no minimums required for standard automobile liability insurance policies. This bill is now in the hands of the Assembly Financial Institutions and Insurance Committee.

New York proposes rulemaking on DME fee schedule

The New York Workers’ Compensation Board (WCB) recently published a rule-making notice on its website that proposes changes to its existing DME fee schedule. The WCB adopted the new ‘state based’ DMEPOS fee schedule based upon HCPCS codes and Maximum Allowable Reimbursement (MARs) as established within the fee schedule. The proposed changes affect specific segments of the fee schedule text and recommends changes to both fee schedule coding (deletion and addition of codes) as well as modifications to reimbursement rates for various items. The WCB will accept comments on the proposed rule until February 17, 2024. More information on the proposed rulemaking can be found here.

New Mexico workers’ comp 2024 fee schedule and billing instructions adopted

Effective January 1, 2024 the New Mexico Workers’ Compensation Administration (WCA) published the following updates to its health care provider fee schedule and billing instructions:

Updated procedure coding
Updated fee schedule rates based on the usual update methodology and updated hospital ratios
An added state-specific EOB code for untimely billing
Several amended provisions to align with existing statutes or rules (amended reconsideration bill language, corrected DME preauthorization timeframe, and removal of “upon the payer’s request” language from certain invoice submission requirements)
Decreased reimbursement for medical cannabis (New Mexico remains the only state with a specific fee schedule rate for medical cannabis under workers’ comp)

The WCA opted to make the following modifications in the final adopted language to two changes they had originally proposed:

The additional EOB code for untimely billing was placed at the end of, instead of in the middle of, the existing list of EOB codes to avoid renumbering all the existing codes after it in the list. This modification to what was proposed was made in response to written comments the Optum Workers’ Comp and Auto No-Fault Public Policy and Regulatory Affairs team submitted to the WCA.
WCA opted to not move forward with originally proposed deletions of certain provisions stating that reimbursement includes the lesser of billed amounts and contractual/negotiated amounts based on a public comment recommending they not delete that language because it could lead to confusion.

More information on these changes, including the full text and the WCA’s response to submitted comments, can be viewed online here.

Pennsylvania court rules on use of Red Book drug pricing

Recently a Pennsylvania Appeals Court reviewed a lower court decision regarding the use of Red Book as the pricing guideline for determining reimbursement for prescription drugs in workers’ compensation claims. The court ruled that the current Average Wholesale Price (AWP) source cited by the Department of Labor and Industry was “not consistent with the standard interpretation of AWP.”

The statute in question ties pharmaceutical reimbursement to 110% of AWP and by rule the Department of Labor and Industry (DL&I) cites Red Book as the AWP source to be used when resolving reimbursement disputes between providers and payers. The insurer appealed the lower ruling, which stated they were required to pay a pharmacy for medications utilizing the AWP as prescribed by Red Book, arguing that the cited source does not provide an actual representation of ‘average wholesale prices’ charged by wholesalers when selling pharmaceuticals to dispensing pharmacies. The Appellate Court agreed with the insurer and also ordered the DL&I to identify a new nationally recognized source publication of AWP to utilize when resolving their disputes. The Appellate Court ruling can be found here.

Tennessee workers compensation Medical Impairment Rating Registry program rule adoption

The Tennessee Bureau of Workers’ Compensation adopted changes to its Medical Impairment Rating Registry (MIR) rules, by adding a requirement to a physician application for appointment to the Certified Physician Program (CPP). The change adds licensed chiropractors to the list of board-eligible or board-certified providers. Additionally, a notice to cancel or reschedule an impairment evaluation appointment will increase from three business days to at least seven, with increases to the cancellation fee scale. At the program coordinator’s discretion, the evaluation fee may be increased up to an additional $750.00 if the MIR report incorporates diagnoses from two or more chapters of the AMA guides. The changes take effect March 4, 2024, and can be found here.

New workers’ comp medical fee calculator available in Virginia

The Virginia Workers’ Compensation Commission (WCC) Medical Fee Services Department announced a new Medical Fee Schedule (MFS) Calculator, which became available for a testing phase in December 2023 with an official go-live date in January. This calculator replaces the existing MFS Reference Tool and includes both new and enhanced features. The MFS Calculator is intended to be a convenient resource that determines regional classifications and maximum rates of payments, incorporating applicable ground rules adjustments at the bill level to return the combined fee scheduled maximum assigned amount. The MFS Reference Tool will remain active until January 31. Biennial updates to the medical fee schedules and ground rules adopted by the WCC became effective January 1, 2024.

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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